The Law Commission

Consultation Paper No 187

ADMINISTRATIVE REDRESS: PUBLIC

BODIES AND THE CITIZEN
A Consultation Paper
ii
 THE LAW COMMISSION
The Law Commission was set up by section 1 of the Law Commissions Act 1965 for
the purpose of promoting the reform of the law.

The Law Commissioners are:

The Honourable Mr Justice Etherton, Chairman
Professor Elizabeth Cooke1
Mr David Hertzell
Professor Jeremy Horder
Kenneth Parker QC
The Chief Executive of the Law Commission is William Arnold and its offices are at
Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ.

This consultation paper, completed on 17 June 2008, is circulated for comment and
criticism only. It does not represent the final views of the Law Commission.

The Law Commission would be grateful for comments on its proposals before
7 November 2008. Comments may be sent either –

By post to:
Keith Vincent
Law Commission
Conquest House
37-38 John Street
Theobalds Road
London
WC1N 2BQ
Tel: 020-7453-1293
Fax: 020-7453-1297

By email to:
administrativeredress@lawcommission.gsi.gov.uk

It would be helpful if, where possible, comments sent by post could also be sent on
disk, or by email to the above address, in any commonly used format.

We will treat all responses as public documents in accordance with the Freedom of
Information Act and we may attribute comments and include a list of all respondents'
names in any final report we publish. Those who wish to submit a confidential
response should contact the Commission before sending the response. We will
disregard automatic confidentiality disclaimers generated by an IT system.

This consultation paper is available free of charge on our website at:

http://www.lawcom.gov.uk/docs/cp187.pdf.

1
Professor Elizabeth Cooke was appointed a Law Commissioner with effect from 3 July 2008, in
succession to Mr Stuart Bridge. This consultation paper was finalised on 17 June 2008.

iii
 THE LAW COMMISSION

ADMINISTRATIVE REDRESS: PUBLIC BODIES

AND THE CITIZEN
CONTENTS

PART 1: INTRODUCTION 1

Introduction 1
History of the project 1
Initial consultation 1
Responding to this Consultation Paper 2

PART 2: OVERVIEW 3

PART 3: THE CURRENT POSITION FOR REDRESS 6

Introduction 6
General principles of good governance and accountability 6
Benefts of non-court remedies 7
Internal procedures 12
External procedures 18
Ombudsman schemes 20
Residual cases 28
Judicial review 29
Tort law 31
Damages under the Human Rights Act 1998 50
Damages under EU Law 52

PART 4: LIABILITY IN PUBLIC AND PRIVATE LAW 54

Introduction 54
Underlying principles 55
Overview of current problems 55
Suggested options for reform 75

iv
 Movement between public law and private law 96
Closing comments 98

PART 5: RELATIONSHIP BETWEEN OMBUDSMEN AND COURT-BASED

OPTIONS 99
Introduction 99
Factors governing the relationship between courts and ombudsmen 99
Movement between ombudsmen and the courts 103
Access to the ombudsmen 108

PART 6: EFFECT ON PUBLIC BODIES 117

Introduction 117
Overview: gains and losses 117
Assessing the effects 119
Common law liability: a cautionary tale 128

PART 7: SUMMARY OF SPECIFIC POINTS FOR CONSULTATION 132

Introduction 132
Part 4 – Liability in in public and private Law 132
Part 5 – Relationship between ombudsmen and court-based options 133
Part 6 – Effect on Public Bodies 133

APPENDIX A: PRINCIPLES UNDERLYING REFORM 134

APPENDIX B: THE IMPACT OF LIABILITY ON PUBLIC BODIES 142
APPENDIX C: JUDICIAL REVIEW CASE RESEARCH 162

v
vi
 PART 1
INTRODUCTION

INTRODUCTION
1.1 This Consultation Paper deals with the question: when and how should the
individual be able to obtain redress from a public body that has acted in a
substandard manner?

HISTORY OF THE PROJECT

1.2 The origins of this project lie in the consultation exercise we undertook in
preparing our Ninth Programme of Law Reform.

1.3 As a part of this exercise, we published a discussion paper, Monetary Remedies

in Public Law, in October 2004.1 The Ninth Programme was published in March
2005, following approval by the Lord Chancellor. The Ninth Programme made
provision for a scoping study to be undertaken as a preliminary step to a
substantive law reform project. The scoping paper, Remedies against Public
Bodies,2 was published in October 2006 and sought to delineate the scope of the
project.

INITIAL CONSULTATION
1.4 As this project is directly concerned with the liability of public bodies, we
recognised during the preparation of this Consultation Paper that it was important
to conduct early discussions with public bodies across central and local
government.

1.5 During autumn 2006, we set up a government contact group comprising

representatives from a number of government departments, the Local
Government Association and the police. Meetings with the contact group helped
us to understand how the current law affects public bodies and what the effect of
any reforms might be.

1.6 In autumn 2007, a draft Consultation Paper was circulated within the government
consultation group for comment from interested public bodies. The feedback
received from this process raised the specific concerns that any changes to the
current regime for liability in tort or judicial review could lead to “defensive
administration” by public bodies and cause an unjustifiable expansion in
government liability.

1.7 This Consultation Paper seeks to address these concerns within the context of
creating a clear, simple and just system of redress for individuals who have
suffered loss due to substandard administrative action.

1.8 To further our understanding of alternative mechanisms to court-based remedies,

we have met the Parliamentary Commissioner for Administration, the Welsh
Public Service Ombudsman and the Local Government Ombudsman to discuss
1
Monetary Remedies in Public Law: Discussion Paper (11 October 2004).
2
Remedies against Public Bodies: A Scoping Report (10 October 2006).

1
 issues relating specifically to the relationship between ombudsmen and the
courts.

1.9 We also had the advantage of a well-attended seminar with a range of academics
on 26 April 2007. In addition, Justice David Ipp of the New South Wales Court of
Appeal kindly agreed to speak at a seminar organised in association with the
London School of Economics on 12 March 2008. Justice Ipp, who was
responsible for the report that preceded the reform of negligence in Australian
jurisdictions in 2002, spoke on the current state of negligence laws in Australia.

1.10 We would like to record our particular thanks to Donal Nolan and Tom Cornford,
both of whom very helpfully gave us access to unpublished material.3

RESPONDING TO THIS CONSULTATION PAPER

1.11 This Consultation Paper deals with issues of vital importance to public bodies and
the public at large. The question of when individuals should be able to obtain
redress from public bodies necessitates fine balances of public policy and justice.

1.12 In this Consultation Paper, we suggest various options for reform which appear to
us to offer a principled and balanced way forward. These are difficult issues. The
proposals we present are tentative and provisional. Others will prefer to see the
balances between public and private interests struck in different ways. Even
those who agree with the broad thrust of our approach will see different ways of
working out the details. We will be undertaking a wide consultation process in
order to gather as many different views and information as possible. Details of
how to respond can be found on the inside front page.

3
D Nolan, “The Reach of Breach: Breach of Duty as a Control Mechanism in Negligence”
(forthcoming); T Cornford, Towards a Public Law of Tort (forthcoming).

2
 PART 2
OVERVIEW
2.1 At the outset, we wish to emphasise that everything contained in this
Consultation Paper is provisional and depends on the responses to consultation.

2.2 This project examines the mechanisms through which claimants can obtain
redress from public bodies for substandard administrative action. In undertaking
this project, we have been guided by two fundamental conclusions. The first is
that, in principle, claimants should be entitled to obtain redress for loss caused by
clearly substandard administrative action. The second is that special
consideration should be given to the role played by public bodies when
considering when and under what terms they should be liable for such losses.

2.3 Part 3 starts the discussion of redress by analysing the various mechanisms
currently available for aggrieved citizens who are seeking redress for
substandard administrative action. We divide these mechanisms into four broad
pillars of administrative justice. The first pillar consists of internal mechanisms for
redress, such as formal complaint procedures. The second pillar is composed of
external non-court avenues of redress, such as public inquiries and tribunals. The
third pillar consists of the public sector ombudsmen. Finally, the fourth pillar is
formed by the remedies available in public and private law by way of a court
action.

2.4 Our general view is that, while the vast majority of complaints are handled
effectively in the first three pillars, there are a comparatively small number of
“residual” complaints where the involvement of the courts is necessary. Therefore
it is vital to consider the appropriateness and effectiveness of court-based
remedies.

2.5 The analysis of court-based remedies is divided between those available in

judicial review and in private law. In private law, we focus on the torts of
misfeasance in public office, breach of statutory duty and negligence.

2.6 Part 4 builds on the analysis in Part 3 to highlight certain defects in the current
law relating to court-based remedies. In judicial review, we consider that it is
incorrect that damages are available in situations covered by EU law and by the
Human Rights Act 1998 but are not available in other situations solely covered by
domestic law.

2.7 In private law, we consider that the current situation is unsustainable. The
uncertain and unprincipled nature of negligence in relation to public bodies,
coupled with the unpredictable expansion of liability over recent years, has led to
a situation that serves neither claimants nor public bodies. Furthermore, we
believe that recent developments in the torts of misfeasance in public office and
breach of statutory duty render them unsuitable in relation to public bodies in the
modern era.

3
 2.8 In light of this, we suggest that there is a strong argument for the reform of court-
based administrative redress in both public and private law. In developing the
structure of potential reform, we have drawn heavily on the principle of modified
corrective justice. By “modified corrective justice”, we mean a model of
“corrective justice” that properly reflects the special position of public bodies and
affords them appropriate protection from unmeritorious claims.

2.9 Part 4 goes on to suggest specific reforms of court-based redress in both public
and private law. This would involve the creation of a specific regime for public
bodies based around a series of individual elements. At the core of these
individual elements would be a requirement to show “serious fault” on the part of
the public body. We feel this would properly address the concerns of public
bodies and the needs of claimants.

2.10 We provisionally suggest that damages should be available in judicial review if

the claimant satisfies the elements of conferral of benefit, serious fault and
causation. However, an award of damages would serve only as an ancillary
remedy in judicial review and could only be claimed alongside the prerogative
remedies. In keeping with other remedies available in judicial review, damages
would be discretionary in the public law scheme.

2.11 Our suggested approach in private law is to place certain activities, which can be
regarded as “truly public”, in a specialised scheme. Within this scheme, the
claimant would have to satisfy the same requirements as the public law scheme
in order to establish liability. The general of effect of these reforms would be to
restrict liability in some areas and widen the potential for liability in others. This
reflects our attempts to strike a balance between the following competing
demands:

(1) Setting the boundaries in which citizens may obtain redress where they
are subject to serious substandard administrative action; and

(2) Appreciating that public bodies are subject to a wide range of competing
demands and are thus in a special position. This means that imposing
general negligence liability may not be in the interests of justice as it
could adversely affect the activities of the public body and therefore harm
the general public.

2.12 Cases that do not satisfy the “truly public” test would be determined by the
ordinary rules of negligence.

2.13 The other significant reform we suggest in Part 4 is to modify the operation of the
general rule of joint and several liability in private law as it applies to public
bodies, since it can operate in a particularly unjust way. For example, a failure in
a public body’s regulatory oversight is often not the direct cause of the claimant’s
loss, which may be the wrongdoing of another, but the public body may have to
bear the loss in its entirety.

2.14 Allowing for a relaxation of the rule where the respondent is a public body will
allow for an equitable apportionment of damages. After the requirement to show
serious fault on the part of the public body, this constitutes a further limitation of
liability. In addition, the normal rules relating to contributory negligence would

4
 apply, which would allow for an award to be reduced if the claimant was partly to
blame.

2.15 The object of these reforms is to improve the public and private law systems to
ensure they appropriately reflect the special nature of public bodies and balance
those considerations with the interests of claimants. However, improving the
court-based system is only part of this project. The other significant part is to
facilitate the resolution of cases through non-court mechanisms, consistent with
the Government’s commitment to alternative dispute resolution.

2.16 As we note in Part 3, the public sector ombudsmen are an important pillar of
administrative justice in their own right. While internal complaint mechanisms
resolve a huge amount of individual cases, the ombudsman can undertake large-
scale investigations into systemic issues and make findings and
recommendations that can effect widespread administrative change. As such, the
ombudsmen can play a crucial role in improving administrative action to the
benefit of both public bodies and claimants.

2.17 In order to encourage the role of the ombudsmen in providing administrative

redress, Part 5 makes two main suggestions for reform. First, we suggest the
creation of a power to stay actions, encouraging claimants to submit suitable
claims to the ombudsmen before attempting to obtain a legal remedy through the
courts. Second, we suggest that access to the ombudsmen be improved by
modifying the “statutory bar” in relation to all ombudsmen and removing the MP
filter in relation to the Parliamentary Commissioner for Administration
(Parliamentary Ombudsman).

2.18 We recognise that any changes to the liability regimes for public bodies have the
potential to cause concern to both claimants and public bodies themselves. In
Part 6 we address some of these concerns by considering the potential costs and
benefits for public bodies. We also draw on research contained in Appendix B to
address concerns that liability leads to defensive practices. Lastly, Part 6 notes
the range of options available to government if there is particular concern relating
to liability exposure in specific areas. These would include the possibility of
statutory immunities, such as that which exists for the Financial Services
Authority under section 102 of the Financial Services and Markets Act 2000, or
statutory caps for individual claims.

2.19 Unfortunately, in the absence of reliable empirical data in this area, what Part 6
cannot do is to quantify the resource implications of our suggested reforms. The
lack of empirical data in this area is of particular concern to the Law Commission
and a specific request for information on the possible consequences of changes
in liability is made in Part 6.

2.20 In summary, the substance of the reforms proposed by the Law Commission are
found in Parts 4 and 5, with Part 3 providing the broader context of the project.
For convenience, Part 7 sets out the consultation questions in a single place.

5
 PART 3
THE CURRENT POSITION FOR REDRESS

INTRODUCTION
3.1 In the scoping paper, Remedies Against Public Bodies, published in October
2006, the Law Commission set out the central question to be addressed in this
project: when and how should the individual be able to obtain redress against a
public body that has acted wrongfully? In seeking to address some of the issues
raised by that question, this Part considers the variety of mechanisms currently
available for individuals claiming redress from public bodies. In broad terms, we
will consider four pillars of administrative justice.

3.2 Consistent with the government’s current emphasis on internal complaint

handling and alternative dispute resolution methods, the first mechanism to be
considered concerns internal complaint schemes. These are seen as providing
an informal, efficient and inexpensive resolution of complaints for both the
complainant and public body involved.

3.3 The second pillar of administrative justice considered in this paper is that
provided by tribunals and, occasionally, public inquiries. These external
mechanisms for administrative review are currently being reformed by the
Tribunals, Courts and Enforcement Act 2007.

3.4 The third pillar to be considered covers the public sector ombudsmen. Although
they could be seen as falling within the second pillar, as they too offer a non-court
based form of redress, it is our view that the nature and significance of the
ombudsmen are such that they should be seen as a system of justice in their own
right.

3.5 The fourth, and final, pillar of the administrative justice system is the courts. While
the first three pillars of redress are vital to providing an effective system of
administrative accountability, these non-court avenues will not be able to provide
appropriate redress in all cases. In practice, there will be cases that for various
reasons require the court’s attention.

3.6 Before turning to an examination of these mechanisms for obtaining redress, it is

important to consider two preliminary questions. First, what is the impetus behind
the need to provide for redress? And second, why is it important to consider non-
court based remedies? These questions are addressed below.

GENERAL PRINCIPLES OF GOOD GOVERNANCE AND ACCOUNTABILITY

3.7 The impetus providing redress to claimants for unlawful or negligent
administration lies in the aims of improving administrative action and decision-
making, promoting good governance and achieving accountability and
transparency in public administration. These aims are consistent with the
Government’s current Service Transformation Agenda, the reform programme

6
 designed to raise standards of service, reduce inequalities and increase
responsiveness to users.1

3.8 Complaint handling plays a vital role in achieving these goals. Receiving,
investigating and resolving complaints has the potential to expose systemic
failures in administrative behaviour and to improve shortcomings in the standard
or responsiveness of service delivery. The provision of effective mechanisms for
redress is also an integral part of good governance and such mechanisms should
be subject to the same high standards of responsiveness, accountability and
transparency as administrative action as a whole. In this sense, providing an
effective system of redress to claimants is not just consistent with good
governance and administrative accountability, it is a manifestation of them.

BENEFITS OF NON-COURT REMEDIES

3.9 Complaints will best fulfil their roles in redressing citizens’ grievances and
improving administration if there are suitable internal and external review
mechanisms in place to deal with them. While courts are one form of external
review, in many situations they are not the most appropriate mechanism to meet
these twin needs.

3.10 First, court-based systems do not always offer the types of remedies or solutions
desired by the claimant. Other external review and complaint-handling
mechanisms can provide more appropriate and tailored remedies for claimants.
Secondly, non-court dispute resolution mechanisms, particularly ombudsmen,
can be more effective at highlighting systemic administrative problems and
therefore can have a greater impact on the quality of public service delivery than
the courts. Thirdly, court-based systems can be expensive and even more time-
consuming.

Achieving claimants’ objectives

3.11 The reasons why complaints are made are complex and sector-specific.2 While
financial compensation is an important motivating factor, studies show that in
practice, claimants often have a hierarchy of objectives. In many cases, in
addition to monetary redress, claimants seek reassurance that their particular
case has been given appropriate consideration and that the law has been applied
correctly and fairly.3

3.12 Complaints can be motivated by a desire to obtain recognition of the fact that the
complainant has been mistreated. Parallels may be drawn with empirical
research on clinical negligence litigation, which has shown that many individuals
who have been poorly treated simply want an investigation into the mishandling

1
D Varney, Service transformation: A better service for citizens and businesses, a better
deal for the tax payer (2006) p 3.
2
Research suggests that claimants are less likely to be interested in compensation in cases
concerning clinical negligence, children, discrimination, unfair police treatment and
immigration than in cases concerning welfare benefits, consumer, personal injury and
money and debt claims. See: P Pleasance, A Buck, N Balmer, R O’Grady, H Genn, M
Smith, Causes of Action: Civil Law and Social Justice (2004).
3
R Berthoud and A Bryson, “Social security appeals: what do the claimants want?” (1997) 4
Journal of Social Security Law 17, 38.

7
 of their case and, where appropriate, an explanation and an apology.4 A number
of studies have shown that for the majority of claimants, what is really at issue is
an opportunity to express dissatisfaction or to voice a grievance, without actually
requesting a specific outcome.5

3.13 These outcomes cannot necessarily be delivered through litigation. Claimants are
restricted in the remedies they can claim and it may be that a court simply does
not have the jurisdiction to grant claimants what they desire. Even where
claimants want financial compensation, currently the courts are only able to
award monetary damages in a narrowly defined set of circumstances, which
cover precise heads of loss. In the tort of negligence the overarching rationale for
granting damages is to restore the claimant to the position he or she was in
immediately prior to the defendant’s negligence; it is not to achieve a moral
vindication of the claimant’s rights6 or to punish or “make an example of” the
public body.7 Tort law is generally also of little use to those who wish to recover
compensation for worry or emotional distress.8

Improving overall administration

3.14 Empirical research suggests that a large proportion of claimants litigate in the
hope that it will lead to a change in administrative behaviour and help ensure that
mistakes are not repeated.9 Courts are not necessarily the most appropriate
mechanism to achieve these aims. Frequently litigation is piecemeal and fact-
sensitive. A court’s consideration of a particular case does not permit it to
undertake a wide-ranging review of the relevant administrative or professional
practices. Further, the giving of a judgment in a case is not necessarily an
appropriate way for messages to be transmitted to bureaucratic organisations.

3.15 By comparison, non-court redress mechanisms can be better suited to achieving

wider administrative improvements. They are able to offer the more structured
4
See J Allsop, “Two Sides to Every Story: Complainants’ and Doctors’ Perspectives in
Disputes about Medical Care in a General Practice Setting” (1994) 16 Law and Policy 165;
R Kyffin, G Cook and M Jones, Complaints Handling and Monitoring in the NHS: A Study
of 12 Trusts in the North West Region (University of Liverpool Institute of Medicine, Law
and Bioethics 1997); C Vincent, M Young and A. Phillips, “Why Do People Sue Doctors? A
Study of Patients and Relatives Taking Legal Action” (1994) 343 The Lancet 1609, 1612.
5
Above.
6
Damages, however, may be awarded to vindicate private rights, for example, in
defamation: see Downtex v Flatley [2004] EWHC 333 (QB), [2004] All ER 454.
7
Punitive damages can be awarded, in order to punish and deter the wrongdoer, in limited
circumstances: H McGregor, Macgregor on Damages (17th ed 2003) paras 11-011 to 11-
031. However, it is hard to see when they could be available in negligence: see para 11-
015.
8
See further Alcock v Chief Constable for South Yorkshire [192] 1 AC 310. Exceptions to
this principle are damages for bereavement and damages where the claimant’s suffering
manifests itself as clinically diagnosed psychiatric injury. Both exceptions are tightly
controlled – see for example, White v Chief Constable of South Yorkshire [1998] 3 WLR
1510.
9
In one study, as many as 74% of respondents said that they had complained in order to
prevent the conduct complained of from happening again: R Kyffin, G Cook and M Jones,
Complaints Handling and Monitoring in the NHS: A Study of 12 Trusts in the North West
Region (University of Liverpool Institute of Medicine, Law and Bioethics 1997). See also J
Allsop, “Two Sides to Every Story: Complainants’ and Doctors’ Perspectives in Disputes
about Medical Care in a General Practice Setting” (1994) 16 Law and Policy 165.

8
 and constructive feedback needed to tackle institutional failure and recurring
problems.10 The need for such feedback is in the common interests of claimants
and public bodies alike, since public bodies are keen to avoid “repetitive cycles of
mistakes”.11

Time and cost of litigation

3.16 Litigation will often represent the most time-consuming and resource-intensive
means of resolving disputes. For claimants, the high costs and anxiety of
litigation often hamper access to court. For public bodies, the burden on
resources and the confrontational nature of litigation are major considerations.
This confrontational nature may make litigation particularly unsuitable for
resolving disputes in more sensitive spheres of administration, such as child
welfare and education. In these situations, it is in the common interests of both
defendants and claimants to preserve a good working relationship during and
after dispute resolution.

Incorporating alternative dispute resolution

3.17 Concerns about the costs of litigation have resulted in greater recognition of the
utility of alternative redress mechanisms.12 The Government considers that
“courts should be the dispute resolution method of last resort” and has made a
formal commitment to use alternative dispute resolution (ADR) in all suitable
cases.13 Government is keen to ensure that “problems can be solved and
potential disputes nipped in the bud long before they escalate into formal legal
proceedings”.14 These sentiments have been echoed by the judiciary.15

3.18 The Civil Procedure Rules (CPR) and the courts also actively promote alternative
dispute resolution. Alternative dispute resolution is defined broadly by the CPR as
a “collective description of methods of resolving disputes otherwise than through
the normal trial process”.16 These include “a variety of ombudsman schemes and
regulatory schemes”17 as well as mediation. Recourse to ADR is encouraged in
various ways. Courts may sometimes come under a duty to recommend ADR to
litigants. Courts can further the overriding objective to deal with cases justly by
10
See Parliamentary and Health Service Ombudsman, Principles of Good Administration
(2007), http://www.ombudsman.org.uk/pdfs/pga.pdf (last visited 16 June 2008).
11
National Audit Office, Citizens Redress: What citizens can do if things go wrong with public
services (2004-05) HC 21 paras 3.22 to 3.27.
12
Notably, Lord Woolf, Access to Justice: Interim Report (1995); Lord Woolf, Access to
Justice: Final Report (1996).
13
See Department of Constitutional Affairs, Monitoring the Effectiveness of the Government’s
commitment to using Alternative Dispute Resolution (July 2002) Part 1,
http://www.dca.gov.uk/civil/adr/adrrep_0102.htm (last visited 16 June 2008).
14
Department of Constitutional Affairs White Paper, Transforming Public Services:
Complaints, Redress and Tribunals (2004) Cm 6243.
15
See for example, R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935, [2002] 1 WLR
803; Dunnett v Railtrack plc [2002] EWCA Civ 303, [2002] 1 WLR 2434; Halsey v Milton
Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002; Anufrijeva v
Southwark LBC [2003] EWCA Civ 1406, [2004] QB 1124.
16
Civil Procedure Rules, Glossary.
17
See generally M Supperstone, D Stilitz and C Sheldon, “ADR and Public Law” [2006]
Public Law 299.

9
 “encouraging parties to use an alternative dispute resolution procedure if the
court considers that appropriate and facilitating the use of such procedure”.18 The
parties themselves are also under a similar duty to help the court in furthering the
overriding objective.19 To this end there is provision for a months stay of
proceedings where the parties request this, or the court considers it appropriate
for the purposes of ADR.20

3.19 Where a party has unreasonably refused an offer of ADR, the court has the
discretion to impose a costs sanction. It may do this by departing from the
standard default rule in civil litigation, which is that the successful party is
ordinarily entitled to recover its legal expenses from the other side. For a costs
sanction to apply, it will be for the unsuccessful litigant to prove that their
opponent’s refusal to have recourse to ADR was “unreasonable” in all the
circumstances.21

3.20 In addition to measures under the Civil Procedure Rules to encourage alternative
dispute resolution the government has promised, as part of its ADR Pledge, that
ADR “will be considered and used in all suitable cases wherever the other party
accepts it”. In particular, “departments will improve flexibility in reaching
agreement on financial compensation, including using an independent
assessment of a possible settlement figure”.22 Local authorities are also required
to offer ADR schemes for disputes relating to special educational needs.23

Alternative remedies and judicial review

3.21 The commitment to ADR in the public law sphere is said to be of “paramount
importance" and “failure to adopt it, in particular when public money is involved,
[is] indefensible”.24 The default position is that judicial review is a “legal recourse
of last resort” and appropriate only where all alternative remedies have been
exhausted.25 This applies whether the alternative remedy is an unused statutory
appeal, a statutory complaints procedure or even recourse to the ombudsman.26

18
Civil Procedure Rules, r 1.4(1) and r 1.4(2)(e) respectively.
19
Civil Procedure Rules, r 1.3.
20
Civil Procedure Rules, r 26.4.
21
Case law has developed a number of factors on which this assessment is made: see in
particular Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR
3002 at [16] to [28].
22
See Department of Constitutional Affairs, Monitoring the Effectiveness of the Government’s
commitment to using Alternative Dispute Resolution (July 2002) Part 1,
http://www.dca.gov.uk/civil/adr/adrrep_0102.htm (last visited 16 June 2008).
23
See Bailey, Jones and Mowbray, Cases, Materials and Commentary on Administrative
Law (4th ed 2005) p 95.
24
R (on the application of Cowl) v Plymouth CC [2001] EWCA Civ 1935, [2002] 1 WLR 803
at [1] and [25]. See also Anufrijeva v Southwark LBC [2003] EWCA 1406, [2004] QB 1124.
25
R (on the application of Bancoult) v Secretary of State for the Foreign and Commonwealth
Office [2001] QB 1067 at [27]. See also the Judicial Review Pre-Action Protocol, para 3.
26
See the case law cited by M Fordham, Judicial Review Handbook (4th ed 2001) p 582.

10
3.22 The rule requiring the prior exhaustion of alternative remedies may be explained
by reference to a variety of factors.27 First, there is the need to respect the
intention of Parliament. If Parliament has put in place a comprehensive and self-
contained statutory regime for appeals, then it would be an abuse of process for
a claimant to allow the time limit to expire under that statutory regime and then
seek to introduce a collateral challenge by way of judicial review.

3.23 Secondly, courts are wary of intruding upon the remit of specialised statutory
bodies which may be better equipped to resolve complex disputes of fact. This
may partly be for procedural reasons, since appellate tribunals can take oral
evidence and allow cross-examination of witnesses in a way that is still rare in the
Administrative Court. Furthermore, the appellate body will often possess
expertise and experience in a technical field of administration, as is the case, for
example, with the General and Special Tax Commissioners.

3.24 Thirdly, requiring claimants to exhaust alternative remedies before seeking

judicial review helps relieve pressure on the High Court. This is considered
desirable as judicial review applications raising points of general interest should
be resolved speedily.

3.25 On the other hand, courts may choose to proceed with judicial review if they
consider that it is the more appropriate method in the interests of the case.
Regard will be had to such factors as speed, expense and finality of the
alternative processes and the desirability of a ruling on a point of law, among
others.28

Alternative remedies and liability in tort

3.26 The availability of alternative remedies may also have a bearing on the way in
which a court determines a claim for damages in negligence.29 The court has
grappled with the issue of whether a common law duty of care can co-exist
alongside alternative remedies. Courts tend to deny a duty of care where there
exists an express statutory remedy, although the case law is not without its
difficulties. The same is not necessarily true where the alternative remedy
consists of a complaint to the ombudsman or even judicial review. 30

27
See C Lewis, “The Exhaustion of Alternative Remedies in Administrative Law” (1992) 51
Cambridge Law Journal 138, 139. See also the discussion in R v Panel on Take-overs and
Mergers ex parte Guinness plc [1990] 1 QB 146 at 177.
28
R v Falmouth and Truro Port Health Authority ex parte South West Water Ltd [2001] QB
445.
29
See generally C Booth and D Squires, The Negligence Liability of Public Authorities (2006)
paras 4.55 to 4.73.
30
Above paras 4.61 to 4.62. See also Phelps v Hillingdon London Borough Council [2001] 2
AC 619 at 672; Barrett v Enfield County Council [2001] 2 AC 550; see also A v Secretary
of State for the Home Department [2004] EWHC 1585 (Admin), [2004] All ER 91.

11
 INTERNAL PROCEDURES

Formal complaints
3.27 A formal system for dealing with complaints is a routine feature of modern
administrative practice. Formal complaints could also be seen as the starting
point of all non-court avenues of redress.

3.28 The definition of what constitutes a formal complaint varies greatly across central
and local government. Most public bodies, however, adopt an inclusive
formulation covering any written or spoken expression of dissatisfaction with the
public body’s action, lack of action or standard of service.31 There has in recent
years been a significant increase in public sector complaints,32 encouraged by
the broader effort to deliver public services with a greater emphasis on consumer
satisfaction.33

3.29 Within central government, most complaints systems adhere to a two-tier model.
A complainant’s first port of call should be front-line staff at a local level and only
thereafter should the grievance be pursued at a departmental customer services
unit.34 Some departments and agencies have an independent complaints tier at
the apex of their complaints structure, composed of senior officials who are often
appointed externally.35

3.30 Local bodies are also encouraged to put in place complaints systems as part of
their constitution. Many bodies adopt a three-stage system: it is possible to
complain to front-line staff, a senior officer and the chief executive or an
independent complaints handler. These are not necessarily progressive stages;
complaints that are more serious or complex may proceed directly to the second
or third levels.36

3.31 Central governmental complaints systems have advantages and disadvantages

as compared with litigation. The major advantages are that they are cheaper and
more expeditious than litigation. A recent survey of a number of departments
found that, on average, the internal cost of processing a complaint in central

31
For central government see National Audit Office, Citizens Redress: What citizens can do
if things go wrong with public services (2004-05) HC 21 para 2.5. For local authorities, see
the Local Government Ombudsman, Running a Complaints System: Guidance on Good
Practice 1, http://www.lgo.org.uk/pdf/guide1.pdf (last visited 16 June 2008).
32
T Williams and T Goriely, “A Question of Numbers: Managing Complaints Against Rising
Expectations” in M Harris and M Partington (eds), Administrative Justice in the 21st Century
(1999) 99, p 101.
33
See the Citizen’s Charter, Raising the Standard (1991) Cm 1599 and Parliamentary Health
Service Ombudsman, Principles of Good Administration (2007),
http://www.ombudsman.org.uk/pdfs/pga.pdf (last visited 16 June 2008).
34
National Audit Office, Citizens Redress: What citizens can do if things go wrong with public
services (2004-05) HC 21, para 1.6.
35
Examples include the Adjudicator’s Office for tax disputes against HM Revenue and
Customs and the Independent Case Examiner for complaints against the Child Support
Agency.
36
The Local Government Ombudsman has issued guidance on these systems. Local
Government Ombudsman, Running a Complaints System: Guidance on Good Practice 1,
http://www.lgo.org.uk/pdf/guide1.pdf (last visited 16 June 2008).

12
 government was £155 and most complaints were resolved within 20 days.37 In
addition, it was estimated that the majority of complaints were “cleared up,
amicably settled or at least better explained to citizens so that they are content
with their treatment” at the first stage of the two-step process.38

3.32 There are, however, disadvantages with central government complaints systems,
primarily in relation to accessibility. The research found that individuals do not
always know to whom to address their complaint, nor indeed the relevant process
for lodging a complaint.39 Furthermore, some bodies have adopted a narrow
meaning of “complaint” in practice, screening out those grievances which are not
written, as well as those relating to wider systemic failure.40 Finally, there is a
perception that government complaints systems are not as expeditious or as
generous in terms of financial compensation as consumer complaints
departments in the private sector.41

Internal reviews
3.33 Where public bodies have concerns about service delivery, they have the
capacity to conduct an internal review on the issues. These can occur as a result
of individual complaints or at their own instigation. To this extent, they can be
seen as a “naturally occurring administrative procedure” or a tool for development
of effective decision-making processes.42

3.34 The process of internal review is sector-specific and can depend largely upon the
statute involved. In general, the practice of internal review is speedier and less
expensive than review by an external body such as a court. The reviewer is also
an expert, who will be “familiar with the nuances of discretionary decision
making”.43 It has been commented that internal review “locate[s] initial
responsibility for correcting administrative decisions within the area responsible
for those decisions” and can therefore be “good for morale” and “promote
systemic reform from within”.44

3.35 The drawbacks of internal reviews include the absence of an oral hearing, and
the lack of independence and impartiality, as in some areas the review may be

37
See National Audit Office, Citizens Redress: What citizens can do if things go wrong with
public services (2004-05) HC 21 at paras 2.14 and 3.25 (respectively), which note that time
targets for responses are met in around 80 – 100% of cases.
38
National Audit Office, Citizens Redress: What citizens can do if things go wrong with public
services (2004-05) HC 21, para 1.6.
39
Above, paras 4.2 to 4.6.
40
Above, para 2.8.
41
Above, para 4.12.
42
M Harris, “The place of formal and informal review in the Administrative Justice System” in
M Harris and M Partington (eds), Administrative Justice in the 21st Century (1999) 42, p
44.
43
J Scampion extracted in M Harris, “New Procedures” in M Harris and M Partington (eds),
Administrative Justice in the 21st Century (1999) 156, p 159.
44
Above, p 160. Scampion notes that the quality of decision-making may be effectively
monitored under a system of internal review. See also M Harris, “The place of formal and
informal review in the Administrative Justice System” in M Harris and M Partington (eds)
Administrative Justice in the 21st Century (1999) 42, pp 51-54.

13
 conducted by the primary decision-maker. On this basis, an internal review does
not constitute an independent and impartial tribunal for the purposes of Article
6(1) of the European Convention on Human Rights.45

Mediation
3.36 Mediation is the umbrella term used to describe a range of processes, including
arbitration, conciliation, early neutral evaluation, expert determination and
negotiation. These processes typically exhibit certain common features. All are
confidential, involve a neutral third party and are voluntary, with the parties
retaining the freedom to disengage at any time.46

3.37 One of the primary advantages of mediation is that it can help preserve a
continuing relationship between parties. Studies have found that the conciliatory
or “therapeutic” nature of the process leaves parties more satisfied with the
overall result and better able to maintain good relationships.47 Another attractive
feature of mediation is that it can provide litigants with a wider range of solutions
than those available via litigation. This may include “an apology; an explanation;
the continuation of an existing professional or business relationship perhaps on
new terms; and an agreement by one party to do something without any existing
legal obligation to do so”.48

3.38 While some suggest that mediation offers a cheaper and speedier alternative to
litigation, it is unclear whether this is borne out in the figures.49 Although the
Government has reported significant costs savings, this may be attributable to the
fact that compensation under mediated settlements tends to be at significantly
reduced amounts.50 What is clear is that where mediation is attempted, the
settlement rate is often substantial.51

45
Bailey, Jones and Mowbray, Cases, Materials and Commentary on Administrative Law (4th
ed 2005) p 92.
46
M Supperstone, D Stilitz and C Sheldon, “ADR and Public Law” [2006] Public Law 299,
300.
47
H Genn, “The Central London County Court Pilot Mediation Scheme Evaluation Report”
(2001) 67 Arbitration (the Journal of the Chartered Institute of Arbitrators) 109.
48
Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002 at [15]
(Dyson LJ).
49
See discussion in H Genn, “The Central London County Court Pilot Mediation Scheme
Evaluation Report” (2001) 67 Arbitration (the Journal of the Chartered Institute of
Arbitrators) 109.
50
For example, the Department of Constitutional Affairs has reported cost savings of £28.8
million in 2004-05 and £120.7 million in 2005-06. The latter figure, however, takes account
of a claim for £50 million which was ultimately settled for £1.8 million. See Department of
Constitutional Affairs, Annual Report 2005/2006: Monitoring the Effectiveness of the
Government's Commitment to using Alternative Dispute Resolution (2007) p 3,
http://www.dca.gov.uk/civil/adr/adr_reports.htm (last visited 16 June 2008). See also H
Genn, above.
51
Under the Central London County Court Scheme this was 62%: H Genn, above. The
comparable figure under the Government’s ADR pledge for 2005-06 was 72%.

14
3.39 Empirical studies into ADR pilot schemes and the Government’s own review of
ADR indicate a number of difficulties associated with the mediation process.52
These difficulties include reluctance by parties to agree to mediation where it has
been offered.53 This can be because of a lack of confidence in the ability of
mediators to handle complex legal and evidential issues, as well as the
perception that agreeing to mediation is a sign of weakness.

3.40 In the public law context, mediation can raise particular issues. First, the
confidential nature of mediation can be counterproductive to the requirements of
accountability and transparency in public service delivery. A court hearing is
sometimes more appropriate when guidance on issues of general importance or
on points of law is required. Processes that take place behind closed doors can
raise suspicions of covering up administrative failure by quietly “purchasing
illegality”.54

3.41 Secondly, it is arguable that there are often significant power imbalances
between citizens and the State, which mediators can be ill equipped to address
and may even magnify.55 The extent to which this is a problem in practice
depends largely upon how robust individual mediators are in ensuring that
individuals are not put under undue pressure.56 In some ways this can be seen as
a question of training, rather than of principle.

Statutory compensation schemes

3.42 Parliament has created a large number of sector-specific compensation
schemes, which vary widely in their size and purpose. Most, however, tend to be
large-scale and are designed to provide relief on a long-term basis for on-going
problems, such as compensation for compulsory acquisition of land57 and the
Criminal Injuries’ Compensation Scheme.58

3.43 While there is no standard model for statutory compensation schemes, they
typically exhibit a number of common features. First, compensation is often
awarded on a no-fault basis. Relieving claimants from having to establish
wrongdoing is often justified on grounds of solidarity and collective responsibility.

52
In particular, see H Genn, “The Central London County Court Pilot Mediation Scheme
Evaluation Report” (2001) 67 Arbitration (the Journal of the Chartered Institute of
Arbitrators) 109, for examination of a pilot scheme. See also Department of Constitutional
Affairs webpage, Monitoring the Effectiveness of the Government’s Commitment to ADR –
Annual Reports, http://www.dca.gov.uk/civil/adr/adr_reports.htm (last visited 16 June
2008).
53
See H Genn, above. The report found that in only 5% of cases was recourse had to
mediation. This compares to the Department of Constitutional Affairs notes that in 2002-
2003, only 27% of offers to mediate by government departments were accepted by
claimants: http://www.dca.gov.uk/civil/adr/adrrep_0203.htm (last visited 16 June 2008).
54
C Harlow, State liability: Tort Law and Beyond (2004) p 105.
55
See H Genn, “The Central London County Court Pilot Mediation Scheme Evaluation
Report” (2001) 67 Arbitration (the Journal of the Chartered Institute of Arbitrators) 109.
56
M Supperstone, D Stilitz and C Sheldon, “ADR and Public Law” [2006] Public Law 299,
312.
57
See the Land Compensation Acts 1961 and 1973.
58
See the Criminal Injuries Compensation Act 1995; discussed in P Cane, Atiyah’s
Accidents, Compensation and the Law (7th ed 2006) ch 12.

15
 Secondly, many schemes allow recovery in respect of a wide range of losses,
some of which would ordinarily be disregarded by courts of law. Thirdly, statutory
schemes tend to award compensation at fixed tariffs or within pre-set brackets,
which can lead to lower awards than those given by the courts. It is sometimes
argued that capping awards enables a more efficient management of public
expenditure.59

3.44 Statutory compensation schemes perform a valuable function in providing

remedies in particular areas; they identify specific situations in which it is
accepted that the citizen should receive compensation. Such schemes have,
however, been criticised in a number of respects. They can adopt a less
generous approach to quantifying compensation. Their eligibility criteria are
sometimes criticised for being under-inclusive and excluding borderline
claimants. No-fault schemes have been criticised for being open to abuse by
fraudulent claims and for providing “free insurance” for negligent officials.60
Notwithstanding these criticisms, such schemes are an important part of the
government’s ability to provide redress for large-scale issues on a principled and
measured basis.

Ex gratia payments
3.45 A public body may also provide redress by making an offer to compensate
individuals whom they have injured, on a voluntary (or ex gratia) basis without
admitting legal liability.

3.46 The practice of offering ex gratia payments remains largely informal, frequently –
though not solely – consisting of one-off payments made in an ad hoc fashion. In
some cases, government departments have developed their own policies on ex
gratia payments,61 whereas in others, permanent compensation funds are put in
place.62 Local bodies are encouraged to offer redress on an ex gratia basis and
even to form a “corporate policy on remedies”.63 They have been given express
statutory powers to offer payment in cases where they consider that an individual
has been “adversely affected” as a result of their “maladministration”.64 The

59
D Cohen, “Tort Law and the Crown: Administrative Compensation and the Modern State”
in K Copper-Stephenson and E Gibson (eds), Tort Theory (1993) p 361.
60
See generally C Harlow, State Liability: Tort Law and Beyond (2004) p 88; and P Cane,
Atiyah’s Accidents, Compensation and the Law (2006) chs 12, 15, 16 and 18.
61
For example, the HM Revenue and Customs has a Code of Practice. See HM Revenue
and Customs, Complaints and putting things right,
http://www.hmrc.gov.uk/factsheets/complaints-factsheet.pdf (last visited 16 June 2008).
See also the Prison Service Order on Finance discussed in D Fairgrieve, State Liability in
Tort: A Comparative Law Study (2003) p 253.
62
Examples include the funds set up to compensate recipients of contaminated blood
products and victims of NvCJD: see P Cane, Atiyah’s Accidents, Compensation and the
Law (2006) p 107.
63
The Local Government Ombudsman, Remedies: Guidance on Good Practice 6, p 1,
http://www.lgo.org.uk/pdf/remedies.pdf (last visited 16 June 2008). See also Cabinet
Office, How to Deal with Complaints,
http://archive.cabinetoffice.gov.uk/servicefirst/1998/complaint/b5intro.htm (last visited 16
June 2008).
64
The Local Government Act 2000, s 92.

16
 overall result is that there are currently a “bewildering number” of administrative
compensation schemes.65

3.47 In an attempt to introduce some consistency in the approach of public bodies to

ex gratia payments, HM Treasury has set out extensive guidance, in the context
of accounting for Government expenditure.66 In general, this guidance urges a
cautious approach to ex gratia payments, reminding departments that “it is
important that these payments are made in the public interest, objectively and
without favouritism”,67 and that, as for other public services, “good management,
efficiency, effectiveness and value for money are key goals”.68 Departments must
obtain prior authorisation from HM Treasury before offering a payment. HM
Treasury’s involvement being considered necessary to promote consistency and
to prevent individual departments setting repercussive and expensive
precedents, both internally and elsewhere in the public sector.69

3.48 Departments may offer ex gratia payments where there has been
maladministration or poor service,70 including where this has been discovered by
the public body independently of an ombudsman’s report or even an official
complaint. They may also consider it appropriate to offer compensation where,
more generally, they “fail to meet their standards, or where they fall short of
reasonable behaviour in relation to those they do business with”.71

3.49 Much is left to the discretion of each department in the creation and
implementation of ex gratia schemes. Ministers may decide upon both the
coverage of the scheme and the levels of compensation to be paid out under it.72
They may introduce changes to an ex gratia scheme, or withdraw it without notice
or consultation.73 They also retain considerable latitude when interpreting the

65
See D Fairgrieve, State Liability in Tort: A Comparative Law Study (2003) p 250; Select
Committee on the Parliamentary Commissioner for Administration, Maladministration and
Redress, First Report (1994-95) HC 112.
66
See HM Treasury, Managing Public Money (2007) ch 4,
http://documents.treasury.gov.uk/mpm/mpm_ch4.pdf and Annex 4.14:
http://documents.treasury.gov.uk/mpm/mpm_annex4.14.pdf (last visited 16 June 2008).
67
HM Treasury, Managing Public Money (2007) ch 4, para 4.11.
68
HM Treasury, Managing Public Money (2007) Annex 4.14, para A.4.14.14.
69
HM Treasury, Managing Public Money (2007) ch 2, para 2.1.7,
http://documents.treasury.gov.uk/mpm/mpm_ch2.pdf (last visited 16 June 2008) and
Annex 4.14, paras A.4.14.8 and A.4.14.15.
70
See HM Treasury, Managing Public Money (2007) Annex 4.14, para A.4.14.1;
Parliamentary and Health Service Ombudsman, Principles for Remedy (2007) p 16.
71
HM Treasury, Managing Public Money (2007) ch 4, para 4.12.4.
72
See HM Treasury, Managing Public Money (2007) Annex 4.14, para A.4.14.10 and box
A4.14A for factors which may be taken into account by public sector organisations in
deciding on financial compensation.
73
That is, unless there was a legitimate expectation that the scheme would not be withdrawn
without notice or consultation. See R (on the application of Niazi) v Secretary of State for
the Home Department [2007] EWCA Civ 1495 (Admin), [2007] ACD 75.

17
 eligibility criteria under their scheme. However, decisions in relation to such a
scheme are subject to judicial review.74

3.50 Ex gratia schemes may provide for compensation to be paid out for personal
injury and property damage and also extends to any sort of injustice or hardship
including both financial and non-financial loss.75 As to the level of compensation,
HM Treasury’s guidance states that a department should provide such
compensation as it considers “fair, reasonable and proportionate”.76 This will
normally mean sufficient compensation to restore claimants to their position prior
to the maladministration or service failure.77

EXTERNAL PROCEDURES
3.51 All of the redress procedures discussed above are internal to the public body that
made the decision or engaged in the action or practice in the first instance. In
addition to these internal mechanisms, there are a number of external avenues of
redress that are still non-judicial, in that they do not involve recourse to the
courts. This includes tribunals, public inquiries and ombudsmen. Tribunals and
enquiries are dealt with in this section, ombudsmen in the next.

Tribunals
3.52 Citizens can seek redress for certain types of administrative action in the
tribunals system. Tribunals may or may not award compensation. They can
provide a full review of the merits of administrative decisions and may have the
power to award other remedies.

3.53 The classic role for tribunals is to adjudicate disputes between the citizen and the
state, although there are also very important tribunals determining “citizen to
citizen” disputes (like the Employment Tribunals). There are now over 70
tribunals, some of which play a very significant role in the administrative justice
system; the Asylum and Immigration Tribunal and the Social Security and Child
Support Appeals Tribunal being examples. Tribunals determine more than
500,000 disputes a year between private individuals and individuals and the
state.78 Tribunals are creatures of statute and have grown up “in an almost
entirely haphazard way”,79 which resulted in “a collection of tribunals, mostly

74
For example, see the litigation in relation to ex gratia schemes set up to compensate
soldiers and civilians interned in Far Eastern camps during World War Two: R (Gurung) v
Ministry of Defence [2002] EWHC 2463 (Admin), [2002] All ER 409; R (Association of
British Civilian Internees: Far East Region) v Secretary for Defence (ABCIFER) [2003]
EWCA Civ 473; [2003] QB 1397; and R (Elias) v Secretary of State for Defence [2006]
EWCA Civ 1293, [2006] 1 WLR 3213.
75
HM Treasury, Managing Public Money (2007) Annex 4.14, para A.4.14.1 and box A4.14A.
76
Above para A.4.14.8.
77
Above para A.4.14.1.
78
Hansard (HC), 5 March 2007, vol 457, col 1296.
79
Sir Andrew Leggatt, Tribunals for Users – One System, One Service: Report of the Review
of Tribunals (16 August 2001) para 1.3, http://www.tribunals-review.org.uk (last visited 16
June 2008).

18
 administered by departments, with wide variations of practice and approach, and
almost no coherence”.80

3.54 This lack of uniformity was highlighted in Sir Andrew Leggatt’s 2001 report
Tribunals for Users – One System, One Service. Leggatt proposed wide ranging
reforms, including unifying Tribunals and ensuring Tribunal independence by
severing the administration of Tribunals from sponsoring departments and
creating a single Tribunals service within the then Lord Chancellor’s
Department.81 The Government adopted the Leggatt recommendations, which
led to the Tribunals, Courts and Enforcement Act 2007. The Act unifies the
Tribunals system and enables future reform of the Tribunals system by providing
for the transfer of existing Tribunals into the new system.

3.55 The Act creates a First-Tier Tribunal and Upper Tribunal, headed by the newly
created position of the Senior President of Tribunals.82 It is envisaged that “the
basic pattern of appeal rights will for the most part remain as they are now when
jurisdictions transfer to the new tribunal”.83 The applicants will generally be able,
with permission, to challenge a decision of the First-Tier Tribunal before the
Upper Tribunal on an error of law, with the possibility of appealing to a court on a
point of law only.84 The Act also replaces the Council on Tribunals with the
Administrative Justice and Tribunals Council. This Council will oversee the
administrative justice system and, in particular, the relationships between the
courts, tribunals, ombudsmen and alternative dispute resolution.

Public Inquiries
3.56 While not usually providing resolution for individual complaints, public inquiries
can play an important role in investigating matters which have caused public
concern. In a consultation paper entitled “Effective Inquiries”, the Department of
Constitutional Affairs suggested that public inquiries “have helped to restore
public confidence through a thorough investigation of the facts and timely and
effective recommendations to prevent recurrence of the matters causing
concern”.85 It was suggested that “many inquiries have helped to bring about
valuable and welcomed improvements in public services”.86

3.57 Public inquiries can be instigated by a Minister under the Inquiries Act 2005,
which makes provision for “Ministers to set up formal, independent inquiries
relating to particular events which have caused or have potential to cause public

80
Sir Andrew Leggatt, Tribunals for Users – One System, One Service: Report of the Review
of Tribunals (16 August 2001) para 1.3, http://www.tribunals-review.org.uk (last visited 16
June 2008).
81
Tribunals, Courts and Enforcement Act 2007, Explanatory Notes, para 11.
82
The Senior President designate of Tribunals is Lord Justice Carnwath.
83
Tribunals, Courts and Enforcement Act 2007, Explanatory Notes, para 107.
84
Above, para 106.
85
See Department of Constitutional Affairs, Consultation Paper: Effective Inquiries (May
2004), Executive Summary, http://www.dca.gov.uk/consult/inquiries/index.htm#part1 (last
visited 16 June 2008).
86
See Department of Constitutional Affairs, Consultation Paper: Effective Inquiries (May
2004), Annex B, http://www.dca.gov.uk/consult/inquiries/index.htm#part1 (last visited 16
June 2008).

19
 concern, or where there is public concern that particular events may have
occurred”.87 Inquiries can also be instigated under Ministerial powers in subject-
specific legislation, such as the Police Act 1996, or can be conducted on a non-
statutory basis.

OMBUDSMAN SCHEMES
3.58 The third pillar of administrative justice is composed of the ombudsmen. There
are now no fewer than 43 ombudsmen members of the British and Irish
Ombudsmens’ Association. These include many ombudsmen schemes that are
essentially a part of a regulatory regime for a particular market or other activity.
There are also what might be termed “hybrid” ombudsmen, such as the
Independent Housing Ombudsman, which deal with complaints from both private
and public bodies, or intermediate bodies such as housing associations.

3.59 Central to our concerns are the generalist public sector ombudsmen. They have
jurisdiction to investigate complaints about the administrative actions of public
bodies. The key schemes for this purpose are:

(1) the Parliamentary and Health Service Ombudsman,88 whose broad remit
covers complaints against central government;

(2) the Local Government Ombudsman who covers local authorities in

England; and

(3) the Public Services Ombudsman for Wales who acts as a single
integrated public sector ombudsman.

3.60 These schemes are distinct from the various mechanisms considered as the first
and second pillars. They have broad ranging jurisdictions, to which they apply a
distinctive approach both in terms of the basis of adjudication, and their
methodology.

3.61 The role of the public sector ombudsmen is primarily to investigate complaints of
“maladministration” on the part of public bodies and make recommendations for
redress where the claimant has suffered “injustice” as a result.89 It is not within
their jurisdiction to determine the legality of administrative action or adjudicate on
points of law – this remains the preserve of courts and tribunals.

3.62 In dealing with complaints of maladministration, the ombudsmen play a vital role
in promoting good governance. In addition to resolving the individual complaint at
hand, an ombudsman’s report may illuminate systemic failings that caused the
incidence of maladministration. In this way the ombudsman can provide valuable
diagnostic and feedback functions which can lead to an improvement in service
delivery. Furthermore, the ombudsmen can carry out subject-specific reviews of
particular areas of administration – commonly referred to as special reports –
87
Inquiries Act 2005, Explanatory Notes, para 3. See also Inquiries Act 2005, s 1.
88
The Parliamentary and Health Service Ombudsman comprises the Parliamentary
Commissioner for Administration and the Health Service Commissioner. We are concerned
with the former.
89
The Parliamentary Commissioner Act 1967, s 5(2)(b); Local Government Act 1974, s
26(1).

20
 highlighting and suggesting ways of dealing with, or pre-empting, administrative
failure.

3.63 The Parliamentary Ombudsman and Local Government Ombudsman also

promote institutional development by producing good practice guides for central
and local government respectively.90 Both have published principles of good
administration with the stated aim of helping public bodies avoid
maladministration.91 If maladministration does occur, the Parliamentary
Ombudsman’s recently published “Principles for Remedy” seeks to guide public
bodies on how they should provide remedies for any injustice or hardship
caused.92

Maladministration
3.64 The concept of maladministration, which was deliberately left undefined,93 has
been interpreted broadly by the ombudsmen. It is understood to encompass a
broad range of administrative failure, including “bias, neglect, inattention, delay,
incompetence, ineptitude, perversity, turpitude [and] arbitrariness”.94

3.65 It has been noted that the notion of maladministration reflects “an understanding
of the wider principles of procedural fairness and contemporary expectations as
to what constitutes good administrative practice”.95 Through the notion of
maladministration, the ombudsmen are able to conduct a broad-brush
assessment of the overall manner in which a public body has conducted itself,
including instances of institutional failure. In this respect it is a more holistic
inquiry than judicial scrutiny, which tends to focus on isolated acts or omissions
as being negligent or unlawful.

3.66 A good example relates to wartime detainees. Here the Parliamentary

Ombudsman found that the way in which the Ministry of Defence devised and
announced the ex gratia scheme for wartime detainees amounted to
maladministration. In so doing, the ombudsman relied on general principles of

90
The Local Government Ombudsman, Guidance on Good Practice,
http://www.lgo.org.uk/guidance.htm (last visited 16 June 2008). The Parliamentary
Ombudsman also has a ‘Best Practice’ page on its website:
http://www.ombudsman.org.uk/improving_services/best_practice/index.html (last visited 16
June 2008).
91
See Parliamentary and Health Service Ombudsman, Principles of Good Administration
(2007); the Local Government Ombudsman, Good Administrative Practice: Guidance on
Good Practice 2, http://www.lgo.org.uk/pdf/good_practice_2.pdf (last visited 16 March
2008).
92
Parliamentary and Health Service Ombudsman, Principles for Remedy (2007).
93
See JUSTICE, Our Fettered Ombudsman (1977) and the Parliamentary and Health
Service Ombudsman, Annual Report (1993-94) para 7.
94
Richard Crossman (the Minister in charge of introducing the Parliamentary Commissioner
Bill), cited with approval by Lord Denning in R v Commissioner for Local Administration ex
parte Bradford City Council [1979] 1 QB 287.
95
R Kirkham, “When is it Appropriate to Use the Ombudsman?” [2004] Journal of Social
Welfare and Family Law 181.

21
 good administration, namely that public bodies are required to communicate
clearly and effectively with those affected by their decisions.96

3.67 It is clear that the concept of maladministration is separate from, and broader
than, the legal notions of illegality and negligence. Ombudsmen are therefore
able to give complainants redress in circumstances where it is unavailable in
courts. For example, while there has been a general reluctance to accept delay
as a ground for judicial review, it is a recognised component of
maladministration.97 A public body may be guilty of maladministration even
though it has acted legally.

3.68 In a 2007 asylum appeal, Lord Justice Carnwath drew a sharp distinction
between illegality and maladministration. Whereas the conduct of the Home
Office in handling an asylum application may have amounted to
maladministration (which was an issue for the ombudsman), this was irrelevant to
the court’s inquiry into the legality of the actual decisions of the Home Office:

The court’s proper sphere is illegality, not maladministration. If the...

decisions were unlawful, it matters little whether that was the result of
bad faith, bad luck, or sheer muddle. It is the unlawfulness, not the
cause of it, which justifies the court’s intervention, and provides the
basis for the remedy.98

3.69 A similar point may be made in relation to maladministration and the concept of
negligence. In Reeman, the Department of Transport had wrongfully certified a
defective vessel as seaworthy, causing eventual purchasers to pay a price above
its actual market value. The purchasers’ claim for damages in negligence failed,
as there was no duty of care owed to them to protect their financial interests.99
However, a subsequent investigation of the complaint by the Parliamentary
Ombudsman resulted in a finding of maladministration, with a recommendation
for a substantial amount of compensation.100 In general, ombudsmen have been
more willing than courts to find in favour of applicants who complain about
decisions by regulators, licensing authorities, certification and planning
authorities.101

3.70 There is clearly overlap between the jurisdictions of the courts and ombudsmen.
A particular set of facts may give rise to both a claim in law and a complaint of
maladministration, capable of being pursued either through the courts or by the

96
See R Kirkham, “Challenging the Authority of the Ombudsman: The Parliamentary
Ombudsman’s Special Report on Wartime Detainees” (2006) 69 Modern Law Review 792.
97
See S McMurtrie, “The Waiting Game – the Parliamentary Commissioner’s Response to
Delay in Administrative Procedures” [1997] Public Law 159.
98
Secretary of State for the Home Department v R (S) [2007] EWCA Civ 546, [2007] All ER
193 at [41].
99
Reeman v Department of Transport [1997] 2 Lloyd’s Rep 648.
100
Case No C557/98 First Report of the Parliamentary Ombudsman (1999-00) HC 20.
101
See respectively: Report 93/195 Blaeneau Gwent Borough Council [1995] JPL 1055;
Report 91/B/3837Torbay Borough Council [1997] JPL 81; Case No C557/98 First Report of
the Parliamentary Ombudsman (1999-00) HC 20; Second Report of the Parliamentary
Ombudsman (1989-90) The Barlow Clowes Affair (1989-90) HC 76.

22
 ombudsmen. Demarcation of their respective jurisdictions has caused
considerable difficulty and is considered further in Part 5.

Process and procedure

3.71 In investigating allegations of maladministration, ombudsmen are said to provide
a more accessible, user-friendly alternative to courts.102 Investigation by the
ombudsmen is free for both parties, and the process is less formal and stressful
than an adversarial trial. It is almost entirely paper-based, avoiding the need for
court appearances by public officials.

3.72 A key difference between the courts and ombudsmen is that the ombudsmens’
approach to fact-finding and dispute resolution is more proactive and inquisitorial
than the courts’ approach. Ombudsmen employ teams of expert investigators to
define and investigate independently the nature of the dispute, instructing experts
where necessary.103 The Parliamentary Ombudsman, in particular, enjoys a wide
discretion to adopt such procedures as are considered appropriate in each case
and has the power to compel the disclosure of evidence which would ordinarily
be considered privileged in a court of law, such as minutes of any “closed-door”
meetings.104 Commentators have noted the advantages of the ombudsmen’s
vigorous approach to information gathering:

[I]n the course of the resolution of a dispute, the ombudsman is able

to come into possession of vastly superior knowledge to the courts
and that knowledge is also more reliable as it will have been
established on the basis of its own investigations rather than having
to rely upon the input of the two parties to the dispute.105

3.73 The particular style of investigation has enabled the ombudsmen, particularly the
Parliamentary Ombudsman, to undertake penetrating investigations into matters
of considerable importance and complexity. Notable examples include
investigations into cases of regulatory failure. In Barlow Clowes, the ombudsman
investigated claims against the Department of Trade and Industry in relation to its
conduct over a fourteen year period. This resulted in the government offering
compensation of £156 million to claimant investors.106 Most recently, the
ombudsman investigated information regarding occupational pension schemes

102
See generally M Harris, “The Ombudsman and Administrative Justice” in M Harris and M
Partington (eds), Administrative Justice in the 21st Century (1999) 133, p 136.
103
Above.
104
The Parliamentary Commissioner Act 1967, ss 7(2) and 8(3). Cf the Local Government Act
1974, ss 28 and 29.
105
R Kirkham, “The efficacy of the Ombudsman vs Judicial Review as the best remedy to
produce lasting changes in the behaviour of local authorities: The case for the superiority
of the Ombudsman” (Paper delivered at the Public Law Project Conference: Judicial
Review – Trends and Forecasts, 12 October 2006).
106
See Parliamentary and Health Service Ombudsman, Annual Report (1989-90) HC 353,
para 64. See also G Gregory and R Drewry, “Barlow Clowes and the Ombudsman: Part 1”
[1991] Public Law 192 and G Gregory and R Drewry, “Barlow Clowes and the
Ombudsman: Part 2” [1991] Public Law 408.

23
 given by the Department of Work and Pensions and found that it was “inaccurate,
incomplete, unclear and inconsistent”.107

Remedies available
3.74 For the ombudsmen to recommend a remedy, the complainant must have
suffered “injustice” as a result of maladministration. This has been construed
flexibly to include pure economic loss, distress, lost opportunity and even “the
time and trouble” spent in pursuing a complaint. It is therefore broader than the
recognised heads of loss in tort.

3.75 Following a finding of injustice, the ombudsmen tend to use a broader range of
remedies than courts.108 As well as financial compensation, they can recommend
that the public body apologise to the complainant, provide an explanation and
acknowledgement of what went wrong or reconsider a decision. In addition they
can recommend specific action or reparation in kind such as provision of
specialist equipment or tuition to a wrongly assessed child.109

3.76 Where the ombudsmen choose to recommend financial compensation, money

can be earmarked for particular purposes, such as a child’s education. However,
the amounts recommended by ombudsmen do tend to be comparatively modest.
This has led one commentator to argue that “tort actions are undoubtedly more
appropriate for obtaining larger sums, and are generally the only way to gain
substantial reparation for future loss, such as future loss of earnings”.110
Moreover, certain courses of action remain unavailable to the ombudsmen. They
do not, for example, have the power to grant interim relief pending investigation
of a complaint, whereas this may be available in proceedings for judicial review.

3.77 The diversity of the remedies available to the ombudsmen allows them to
respond flexibly to the complaint at hand and to the particular needs and wants of
the claimant. However, they can also to go beyond individual complaints and
facilitate systemic change. They can recommend reviews of procedure, policy
and practice or suggest that the public body consider the situation of other people
in the claimant’s situation. Special reports can also be useful for these
purposes.111 In this way, individual complaints can result in a review of the whole
system, which has the potential to improve things for many other people. This is
one of the key strengths of ombudsmen schemes.

107
Parliamentary Ombudsman, Trusting in the Pensions Promise: Government Bodies and
the Security of Final Salary Occupational Pensions, Special Report of the Parliamentary
Ombudsman (2005-06) HC 984.
108
In recommending a remedy, the ombudsmen seek to put the complainant in the position he
or she would have been in but for the maladministration. See the Local Government
Ombudsman, Remedies: Guidance on good practice 6,
http://www.lgo.org.uk/pdf/remedies.pdf (last visited 16 June 2008); Parliamentary and
Health Service Ombudsman, Principles for Remedy (2007),
http://www.ombudsman.org.uk/pdfs/principles_remedy.pdf (last visited 16 June 2008). The
remedy must be appropriate and proportionate to the injustice.
109
See for example, the Local Government Ombudsman, Remedies: Guidance on Good
Practice 6, http://www.lgo.org.uk/pdf/remedies.pdf (last visited 16 June 2008).
110
D Fairgrieve, State Liability in Tort: A Comparative Law Study (2003) p 247.
111
For an extended discussion see R Kirkham, “Auditing by stealth? Special Reports and the
Ombudsman” [2005] Public Law 740.

24
 Non-enforceability of recommendations
3.78 Another significant difference between the courts and ombudsmen is that the
latter have no power to enforce their recommendations. This means that, in
principle, a public body can refuse to accept and implement the ombudsman’s
recommendations.112 There are, however, additional mechanisms the
ombudsmen can utilise to help secure redress in the event of non-compliance.

3.79 The Local Government Ombudsman can publish a further report recommending
what action the body should take,113 and if still dissatisfied, it may require the
body to publish a statement in the local newspaper.114 This forces the public body
to state publicly their reasons for not complying with the ombudsman’s
recommendations.

3.80 The Parliamentary Ombudsman is supported by Parliamentary arrangements. In

the event of non-compliance, it has the power to make a special report to
Parliament.115 This is reviewed by the Public Administration Select Committee,
which can call Ministers or Civil Servants before it to justify their refusal to
implement the ombudsman’s recommendations. It has been noted that “the
Select Committee brings to the process a degree of moral and political clout that
would otherwise be absent”.116

3.81 On the whole these arrangements, when invoked, have been effective in placing
pressure on departments to comply with ombudsmen’s recommendations. For
instance, it was only after the publication of a special report117 and intervention by
the Public Administration Select Committee118 that the Government complied with
all of the ombudsman’s recommendations concerning the ex gratia scheme for
Japanese prisoners of war.119 A notable exception is the occupational pensions

112
Public authorities remain bound by findings of injustice and maladministration, subject to
judicial review. See R v Local Commissioner for Administration ex parte Eastleigh Borough
Council [1998] 1 QB 855 at 867 and R (Bradley) v Secretary of State for Work and
Pensions [2007] EWHC 242 (Admin), [2008] All ER 98.
113
The Local Government Act, s 32.
114
These statements set out the ombudsman’s recommendations, why he or she considers
the authority's response unsatisfactory and often also the authority’s reasons for non-
compliance.
115
The Parliamentary Commissioner Act 1967, s 10(3).
116
R Kirkham, “Challenging the Authority of the Ombudsman’s Special Report on Wartime
Detainees” (2006) 69 Modern Law Review 792, 815.
117
Parliamentary Ombudsman, ”A Debt of Honour”: the ex gratia scheme for British Groups
interned by the Japanese during the Second World War, Fourth Report (2004-05) HC 324.
118
Public Administration Select Committee, Second Report: A Debt of Honour (2005-2006)
HC 735.
119
Kirkham suggests that pressure had also mounted as a result of the Administrative Court’s
ruling that the MOD had operated unlawfully in applying the ex gratia scheme: Elias v
Secretary of State for Defence [2005] EWHC 1435 (Admin), [2005] All ER 94: R Kirkham,
“Challenging the Authority of the Ombudsman: The Parliamentary Ombudsman’s Special
Report on Wartime Detainees”, (2006) 69 Modern Law Review 792, 796.

25
 case where the Government has continued to reject the ombudsman’s finding of
maladministration despite the publication of a special report.120

3.82 While the lack of enforcement powers has attracted controversy, calls for
ombudsmen’s recommendations to be enforceable in courts have generally been
resisted on a number of grounds.121 First, the ombudsmen’s recommendations
are said to carry moral authority, which leads to compliance in practice. This was
a point emphasised by the Local Government Ombudsman in their response to
the Law Commission’s Housing Disputes Paper:

Our recommendations have moral force because we act

independently and impartially and they have practical force because
of the reputational risk to the bodies we investigate resulting from
non-compliance.122

3.83 The ombudsmen’s recommendations are complied with in the vast majority of
cases. In 2006-07 there was 100% compliance with both the Parliamentary
Ombudsman’s123 and Local Government Ombudsman’s recommendations,124
suggesting that non-compliance is not a serious issue in practice. Even where the
public body initially resists, the additional mechanisms that can be invoked are
usually effective in placing pressure on the body to comply.

3.84 Secondly, it is argued that non-enforceability facilitates dialogue and co-operation

between ombudsmen and public bodies which ombudsmen rely on in carrying out
their investigations and obtaining redress for complainants. This co-operative
approach is considered a strength of ombudsmen schemes:

120
The Court of Appeal in R (Bradley) v Department of Work and Pensions [2008] EWCA Civ
36, [2008] All ER 98 held that the Minister had acted unlawfully in rejecting the
ombudsman’s recommendations.
121
This is an issue on which we consulted in our Housing Disputes Paper: Housing:
Proportionate Dispute Resolution, An Issues Paper (2006) para 6.27,
http://www.lawcom.gov.uk/docs/issues_paper.pdf. The ombudsmen respondents (namely,
the Local Government Ombudsman, Housing Ombudsman, and Public Services
Ombudsman for Wales) unanimously agreed that ombudsmen recommendations should
not be made enforceable. See Housing: Proportionate Dispute Resolution, An Issues
Paper: Analysis of Responses para 3.32,
http://www.lawcom.gov.uk/docs/disputes_responses_analysis.pdf. A similar approach has
been adopted by the Parliamentary Ombudsman. See Parliamentary and Health Service
Ombudsman, The Ombudsman, the Constitution and Public Services: A crisis or an
opportunity? (December 2006),
http://www.ombudsman.org.uk/about_us/FOI/whats_available/documents/speeches/ombu
dsman_constitution_publicservices.html (last visited 16 June 2006).
122
See Housing: Proportionate Dispute Resolution, An Issues Paper (2006) para 6.26,
http://www.lawcom.gov.uk/docs/issues_paper.pdf.
123
A Abraham, “The Ombudsman and ‘Paths to Justice’: A Just Alternative or Just an
Alternative?”, paper delivered at the Institute of Advanced Legal Studies, 27 June 2007.
124
In 2005-06, there was 99% compliance with the Parliamentary Ombudsman’s
recommendations and 100% compliance with the Local Government Ombudsman’s
recommendations. Note that the latter does not take into account those cases where the
authority has yet to respond to the ombudsman’s recommendations.

26
 The ombudsman is often able to work with the public body concerned
in a positive process of dialogue to find a positive way forward… this
is a lot harder to do, if not impossible with the courts. Thus… the
ombudsman can encourage the body concerned to take ownership of
the issue and the solution... the improvement of public services is
often better achieved through consultation and encouraging the public
body concerned to believe in the idea and take it on board as their
own idea, rather than having it foisted on them through some
adversarial process.125

3.85 An empirical study comparing the coercive style of the Dutch administrative
courts with the co-operative style of the Dutch ombudsmen concluded that the
ombudsmen’s co-operative approach produces less policy tension and fewer
defensive reactions:126

Because ombudsmen decisions are not legally enforceable, officials

will probably feel less threatened. Agencies also are allowed to
implement his recommendations in the ways they prefer. If, however,
defensive reactions do occur, the ombudsman has several ways to
address them in his frequent communications with government
agencies. During many interviews, my research established that, in
response ombudsman’s recommendations, officials may try to
prevent implementation by debating the legal competence of the
ombudsman or by simply ignoring a (non-binding) report. However,
when officials mentioned these and other techniques to sidestep an
ombudsman’s recommendation, they almost immediately added that
these devices were rarely put into practice.127

3.86 There is concern that making recommendations enforceable might result in a

more adversarial and confrontational approach. It might lead to defensive
practices and make the process more formal, costly and lengthy.128 This is
especially so if, as a result of enforceability of their recommendations,
ombudsmen investigations were considered a determination of civil rights for the
purposes of Article 6 of the European Convention on Human Rights.129

125
R Kirkham, “The efficacy of the Ombudsman vs Judicial Review as the best remedy to
produce lasting changes in the behaviour of local authorities: The case for the superiority
of the Ombudsman” (Paper delivered at the Public Law Project Conference: Judicial
Review – Trends and Forecasts, 12 October 2006).
126
M Hertogh, “Coercion, Cooperation, and Control: Understanding the Policy Impact of
Administrative Courts and the Ombudsman in the Netherlands” (2001) 23 Law and Policy
47.
127
Above, p 63.
128
These concerns were raised by the Public Services Ombudsman for Wales: Housing:
Proportionate Dispute Resolution, An Issues Paper: Analysis of Responses, para 3.32(5),
http://www.lawcom.gov.uk/docs/disputes_responses_analysis.pdf.
129
On this point, see Parliamentary and Health Service Ombudsman, The Parliamentary
Ombudsman: Withstanding the Test of Time, 4th report (2006-07) HC 421.

27
 Access to the Ombudsmen
3.87 There are currently two rules which restrict access to the ombudsmen: the “MP
filter” and the “statutory bar”.

The MP filter
3.88 All complaints to the Parliamentary Ombudsman must be channelled through a
Member of Parliament; the Ombudsman cannot accept a complaint directly from
a member of the public. This filter mechanism does not exist for other
ombudsmen in the UK, including the Local Government Ombudsman.130

3.89 Part 5 sets out the concerns about this filter, and puts forward some options for
reform. It suffices to note here that the MP filter was intended to be a mechanism
by which only suitable complaints would be passed on to the ombudsman, that is,
where there was a strong prima facie case and where the ombudsman had
jurisdiction. It can be seen as a product of its time, and the criticisms of it see it as
no longer relevant to a mature ombudsman’s service.

The statutory bar

3.90 The second rule that restricts access to the ombudsmen is that an investigation
cannot be conducted where the complainant has or had recourse to a legal
remedy before a court or tribunal. This is known as the statutory bar. The bar was
intended to prevent the ombudsman from trespassing on the jurisdiction of the
courts and tribunals. However, the “gaps” in the system have narrowed with the
development of administrative law, and many complaints of maladministration are
now also amenable to legal action. This has made the operation of the statutory
bar more difficult and contentious. The problems associated with the bar are
discussed further in Part 5.

RESIDUAL CASES
3.91 The discussion above illustrates the range of non-court avenues which claimants
can use to seek redress for substandard administrative action. From internal
complaints systems to ombudsman schemes, these avenues can provide a
flexible, informal and efficient means of resolving disputes between public bodies
and individuals claimants.

3.92 Whilst these avenues are likely to provide redress for a large proportion of
complaints, it is inevitable that there will continue to be a number of residual
cases that will require the intervention of the courts, either by way of judicial
review or through a private law action. Broadly speaking, these cases will be
dealt with by the courts for one of three reasons:

(1) Only the courts can provide the remedy desired by the claimant, such as
an injunction, mandatory order or damages;

(2) At least one party does not want to engage with non-court processes; or

130
Elsewhere only the French ombudsman operates a similar filter. Other jurisdictions that
had a filter have now removed it, notably Sri Lanka and Hong Kong.

28
 (3) The claimant is not offered, or is not aware of, non-court alternatives to
provide redress.

3.93 Even if the second and third reasons are addressed by strengthening the role of
non-court avenues and by raising public bodies’ and individuals’ awareness of
the benefits of such routes, there will still be a number of residual cases for the
first reason mentioned above. Only the Administrative Court can declare an
administrative decision unlawful, quash an order, or issue a mandatory injunction
requiring the decision-maker to take some kind of positive action. For making
findings of negligence and awarding complex and structured damages, civil
courts are normally appropriate. If these are the types of remedies required by
claimants, then access to the court is necessary and it is vital from the point of
view of both the claimant and the respondent to ensure that the system of
redress is clear, certain and principled.

3.94 The following sections, therefore, consider the ability of claimants to seek redress
for unlawful administrative action and for tortious liability in the court system. This
section also examines the ability to seek redress under the Human Rights Act
1998 and in EU law.

JUDICIAL REVIEW
3.95 Judicial review is the procedure by which a person may challenge the lawfulness
of a decision, action or failure to act in relation to the exercise of a public
function.131 The Administrative Court has an inherent supervisory jurisdiction to
ensure that public bodies operate within the limits of their powers and in
accordance with general principles of law.132 To this end, the Court has a power
to strike down a decision that is unlawful on the grounds of illegality, irrationality
and procedural impropriety.133

3.96 There are limits to the Administrative Court’s role. The constitutional principle of
the separation of powers requires the Court to respect Parliament’s judgment in
entrusting decision-making powers to executive government. Government bodies
must be afforded a degree of latitude when deciding how best to exercise their
discretion. It would be inappropriate for the Court to second-guess government
policies, or to substitute its own views in their place.

3.97 The tension between judicial scrutiny and judicial restraint is a delicate one, and
the Administrative Court has developed various techniques for accommodating it.
First, in exceptional cases, the Court will refuse to entertain a claim for judicial
review where the decision challenged is “non-justiciable”. In practice, however,
the Court gives a very narrow meaning to “non-justiciable” and is wary not to
abdicate its particular constitutional responsibilities.

3.98 Secondly, the Administrative Court’s preferred method for striking the balance
between judicial scrutiny and judicial restraint is to adapt the standard or intensity

131
Civil Procedure Rules, r 54.1(2). A broad range of administrative decision-making is
amenable to judicial review.
132
See R v Ministry of Defence ex parte Smith [1996] QB 517 at 556 (Bingham MR).
133
See generally Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374
at 410 to 411.

29
 of review. It has been observed that the courts now adopt a “soft” standard of
review in relation to certain questions (such as the exercise by a public body of
discretionary judgment in political, social or economic matters), and a more
stringent standard of scrutiny for “hard-edged” questions (such as the
interpretation by a public body of statute, questions of precedent fact and issues
of procedural fairness).134 Discretionary decisions calling for political judgment on
controversial issues remain amenable to judicial review in principle, albeit that the
Court will be more reluctant to find them unlawful. Adjusting the standard of
review on a case-sensitive basis is made possible by the flexibility inherent in the
grounds for review. In relation to review on grounds of irrationality, for example, it
has been said that it “constitutes a sliding scale of review, more or less intrusive
according to the nature and gravity of what is at stake”.135

Procedure for seeking judicial review

3.99 In order to challenge a decision by way of judicial review, applicants must comply
with certain procedural requirements. They must seek permission to bring
proceedings and this must be done promptly and certainly within a strict three-
month time limit after the grounds for the claim arise;136 they must show that they
are sufficiently interested in the matter to have standing;137 and there is a prior
duty to exhaust alternative remedies (such as rights of appeal). More generally,
parties are expected to resolve disputes “in a manner which both meets the
needs of the parties and the public and saves time, expense and stress”.138
These safeguards are designed to protect public bodies from speculative or
vexatious litigation and to enable decision-makers to rely with greater certainty on
the legal validity of their actions.

Remedies available
3.100 Where an administrative decision is found to be unlawful, various remedies are
available, albeit on a discretionary basis only. The Administrative Court may
order the decision-maker to act in a specified manner (mandatory order); or to
abstain from acting in a particular manner (prohibitory order); or the Court may
quash a decision (quashing order) and may remit the matter back to the decision-
maker for further consideration in light of its judgment or substitute the original
decision with its own decision.139 Alternatively, the court may make a declaration
(say, that an administrative decision is unlawful), or grant an injunction preventing
or compelling action by the public body.140

134
M Fordham, Judicial Review Handbook (4th ed 2004) pp 277 to 295.
135
R v Secretary of State for Education and Employment, ex parte Begbie [2000] 1 WLR 1115
at 1130 (Laws LJ). See also R v Ministry of Defence, ex parte Smith [1996] QB 517 at 556
(Bingham MR).
136
Civil Procedure Rules, r 54.5(1).
137
Supreme Court Act 1981, s 31(3). The requirement that the applicant show sufficient
interest to bring the claim is construed liberally: M Fordham, Judicial Review Handbook
(4th ed 2004) pp 727 to 744.
138
R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935, (2002) 1 WLR 803 at [1].
139
Supreme Court Act 1981, s 31(5).
140
Supreme Court Act 1981, s 31(1) and (2).

30
 The limited availability of compensation in judicial review
3.101 Traditionally, the function served by judicial review has not been to award
compensation. The power of the Administrative Court to order monetary
compensation is subject to tight restrictions. First, compensation must be claimed
in conjunction with an existing judicial review remedy. Secondly, and crucially, the
claimant must show that damages would ordinarily have been awarded in private
law.141 This situation is increasingly seen as unsatisfactory, particularly given that
breaches of community law can result in damages awards. The problems with
these restrictions on the recovery of damages in judicial review are discussed
further in Part 4.

TORT LAW
3.102 The limited availability of damages in judicial review has meant that claimants
seeking compensation, out of necessity rather than choice, have resorted to the
law of torts. It follows from the English conception of the rule of law that
essentially the same rules of tort law apply to all defendants, irrespective of
whether they are individuals, private corporations or public bodies.142

3.103 There is no generalised principle of governmental liability, but only a series of

specific (or “nominate”) torts, each governed by its own particular conditions. In
order to qualify for a right to compensation, claimants must be able to
characterise their claims in such a manner that they fit within the structure of an
existing tort.

3.104 Public bodies may clearly be liable for intentional torts. This remains a significant
area where claimants may obtain damages for unlawful action. For example, a
police officer who uses unlawful force when attempting to restrain a suspect may
be liable for battery. Other intentional torts such as false imprisonment and
malicious prosecution are clearly applicable to public bodies.143 A public body
could also in principle be liable for nuisance if it uses its land in an unreasonable
way, causing damage to nearby property owned by the claimant.144

3.105 As many of the common law torts have historically been fashioned by the courts
with a view to regulating relationships between private parties, their use to
regulate citizen/state disputes has not been without difficulty. As the following
sections will show, private law concepts and rationales are not necessarily apt for
the adjudication of claims against public bodies.145

141
Supreme Court Act 1981, s 31(4); Civil Procedure Rules, r 54.3.
142
A V Dicey, Introduction to the Law of the Constitution (10th ed 1959).
143
See respectively R v Governor of Brockhill Prison ex parte Evans (No 2) [2001] 2 AC 19
and Gregory v Portsmouth City Council [2000] 1 AC 419. For other examples of intentional
tort claims made against public authorities, see M Fordham, “Reparation for
Maladministration: Public Law’s Final Frontier” [2003] Judicial Review 104, 104 to 105.
144
See C Booth and D Squires, The Negligence Liability of Public Authorities (2006) paras
16.05 to 16.06 for examples.
145
On the argument that this leads to a distortion of tort law, see C Harlow, State Liability –
Tort Law and Beyond (2004) pp 10 to 41; and Monetary Remedies in Public Law, Law
Commission Discussion Paper (2004) para 8.10.

31
3.106 Two torts, the tort of misfeasance in public office and the tort of breach of
statutory duty, stand out as being of particular relevance in relation to public body
respondents. However, it is the tort of negligence, which has developed as the
primary mechanism for citizens attempting to obtain redress from public bodies
owing to the restrictive nature of misfeasance and breach of statutory duty. All
three are considered in turn below.

The tort of misfeasance in public office

3.107 Misfeasance in public office is an intentional tort, available only against public
bodies. It provides a remedy to claimants who have been harmed by public
officers acting unlawfully and in bad faith.

3.108 In order to establish the tort of misfeasance in public office, the claimant must
prove either targeted or untargeted malice. Targeted malice means conduct
specifically intended to injure the claimant. Untargeted malice is where the
respondent knew or acted with reckless indifference with respect to the
lawfulness of their conduct and its effect on the claimant.146 Proximity, namely a
special relationship between the claimant and the respondent, does not have to
be established.147 However, the claimant must prove material damage caused by
the public officer in order to succeed.148

3.109 Establishing the mental element of the tort of misfeasance in public office has
proved very difficult in practice, with the result that while the tort may be “well
established”,149 it is rarely made out. These difficulties are discussed further in
Part 4.

The tort of breach of statutory duty

3.110 Where a public body breaches a statutory duty, it may be liable to pay
compensation to those harmed by the breach. Breach of statutory duty is a
distinct private law tort that has been developed by the courts at common law. To
establish the tort, a claimant must prove that:

(1) the statute in question intends that a breach of the relevant duty gives
rise to a private law action for damages;

(2) the duty was, in the circumstances, breached by the defendant; and

(3) the breach caused him or her to suffer loss and that this loss was of a
kind contemplated by the statute.

146
Three Rivers District Council v Governor and Company of the Bank of England [2000]
UKHL 33, [2003] 2 AC 1.
147
Above at 193 and 253.
148
Watkins v Home Office [2006] UKHL 17, [2006] 2 AC 395.
149
Dunlop v Woollahra Municipal Council [1982] AC 158 at 172 (Lord Diplock).

32
3.111 Whether or not a particular course of conduct amounts to a “breach” under the
second requirement will depend upon the interpretation of the statute.150 The third
requirement is by and large a fairly routine question of causation. By contrast, it is
the first condition that has attracted the most debate and litigation and which, in
practice, has proved to be the most difficult for claimants to satisfy.

The condition that a statutory duty be actionable in private law

3.112 Claimants must establish that a particular statutory duty is actionable in private
law. The central question is whether “from the provisions and structure of the
statute an intention can be gathered to create a private law remedy”.151 This is
essentially an exercise in statutory construction: “the answer must depend on a
consideration of the whole Act and the circumstances, including the pre-existing
law, in which it was enacted”.152 However, most legislation does not state
expressly whether or not Parliament intended for it to be actionable in private law.
As such, courts have had to develop various techniques as aids to interpretation.

3.113 There is a general default presumption that, where a statute creates a duty and
provides for a specific enforcement mechanism to ensure it is performed (for
example, by making a breach of the duty a criminal offence, and prosecuting
those who commit the breach), then that duty cannot be enforced in any other
manner.153 Alternatively, where no such mechanism exists, it may in fact be
necessary to allow a private law right to sue for damages in order to enforce the
statutory duty effectively.154

3.114 There are further relevant factors. One indicator in favour of actionability is if a
particular statutory duty has been imposed with a view to conferring protection on
only a limited class or sub-section of society to which the claimant belongs.155 For
example, courts frequently hold that health and safety legislation is passed for the
particular benefit of employees and so breach of such legislation is actionable by
them.156 By contrast, broad duties to promote public welfare in general will not
normally be actionable. A related consideration is the level of specificity, or
generality, with which a statutory duty is cast or formulated. The more generic the
obligation, the less likely it is that Parliament intended it to be actionable. It may
also be relevant to have regard to the particular injury suffered by the claimant.

3.115 Statutory interpretation is not an exact science. The above factors are not so
much strict tests as loose indicators. They frequently overlap and may often point

150
Some statutes require the public authority only to take reasonable care, whereas others
are capable of being breached without fault (in which case liability is “strict”). Some
legislation may leave open specific statutory defences. See generally A Dugdale and M
Jones (eds), Clerk and Lindsell on Torts (19th ed 2006) paras 9.53 to 9.54.
151
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057
at [3] (Lord Steyn).
152
Cutler v Wandsworth Stadium Ltd [1949] AC 398 at 407 (Lord Simonds).
153
Doe d. Murray v Bridges (1831) 1 B&Ad 847 at 859; cited with approval in Lonrho Ltd v
Shell Petroleum Co Ltd [1982] AC 173 at 185.
154
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 731.
155
Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173 at 185.
156
See generally A Dugdale and M Jones (eds), Clerk and Lindsell on Torts (19th ed 2006)
para 9.16.

33
 in opposite directions, meaning that the arguments for and against the
actionability of a particular statute are finely balanced in practice. This approach
has led to a perception of uncertainty and unpredictability about how the court will
assess the parliamentary intention behind a particular statute. There also
appears to be a general reluctance by the courts to imply an individual right to
sue in private law where the statutory duty breached simply forms part of an
overall regulatory system or a scheme of social welfare for the benefit of the
public at large.157 The difficulties are discussed further in Part 4.

Tort of negligence
3.116 As there are tight restrictions on bringing claims for compensation on the basis of
misfeasance in public office and breach of statutory duty, it has become an
increasingly popular strategy for claimants to sue public bodies in the tort of
negligence. Claimants will commonly seek to argue that a public body was
negligent in the manner in which it exercised or refused to exercise its public law
powers, or that it lacked diligence when discharging its public law duties. There is
some overlap between the torts of negligence and breach of statutory duty, but
they remain independent. A public body which breaches a statutory duty is not
necessarily liable in negligence; conversely, a body may still be liable in
negligence, even though it did not breach a statutory duty actionable in private
law.158

3.117 In order to make out a claim in negligence, a claimant must show that:

(1) the matter is justiciable;

(2) the defendant owed the claimant a duty of care;

(3) the defendant breached that duty of care; and

(4) the breach caused the claimant to suffer loss.

3.118 The underlying rationale of the tort of negligence in all cases is to provide
compensation for those who suffer loss as a result of the negligence of others. As
a matter of basic principle, courts consider that this standard model applies
equally whether the defendant is an individual or private organisation, or a public
body.159

3.119 At the same time, however, courts have come to accept that claims against public
bodies frequently raise particular difficulties of their own. Where the defendant is
a public body, the traditional goal of ensuring compensation must be weighed
against competing public interest factors, which may for one reason or another
militate against liability.160 Of particular concern has been the potential for state
liability to expand uncontrollably. This is acutely apparent in cases where the
claimant has been injured as an indirect result of a public body’s conduct and
where the injury has consisted of pure economic loss. An example where this
157
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 731 to 732.
158
Bux v Slough Metals Ltd [1973] 1 WLR 1358.
159
Mersey Docks and Harbour Board Trustees v Gibbs (1866) LR 1 HL 93.
160
These are discussed in the following sections.

34
 could have occurred was the BBCI litigation, where, if the claimants had been
successful, then the Bank of England could have been faced with liability
approaching £1 billion.161

3.120 The balance between claimants’ private interests in receiving compensation and
the countervailing public interest can be difficult to strike and outcomes in this
area of the law are often controversial. The focus in the following sections is on
the ways in which the courts’ consideration of public interest concerns can and
has distorted the conventional analysis of a claim in negligence. It also considers
the ways in which the law has become unclear and uncertain to the extent that
outcomes are difficult to predict.

1. Doctrine of Justiciability
3.121 A striking feature of the case law is that courts will sometimes refuse to entertain
a claim in negligence against a public body on the ground that it raises issues
that are “non-justiciable”. Justiciability has been described as “the constitutional
concept which recognises [that] the capabilities of the courts are limited”.162 It is
noticeably absent from private defendant litigation. Justiciability operates as an
extremely potent control mechanism for limiting claims against public bodies,
because it requires the court to strike out a claim without even proceeding to ask
whether or not a duty of care should be owed.

3.122 Courts have evolved and experimented with various techniques for identifying
“non-justiciable” issues, but none have proven entirely satisfactory. In its earlier
decisions, the House of Lords set out two tests for determining justiciability, albeit
these have since attracted considerable comment and criticism.

3.123 An early test, which was laid down in case of Dorset Yacht Club Co Ltd v Home
Office,163 was that a public body’s decision would be justiciable only if it had
involved the body transgressing the scope of its powers (ultra vires).164 That is,
anything done by a body within the limits of its mandate was considered non-
justiciable and so beyond court scrutiny.

3.124 The rationale behind this rule was that it was assumed that Parliament had
intended to confer immunity on public bodies insofar as they acted within the
ambit of their discretion. Nonetheless, the test based on ultra vires was
controversial. For instance, it was considered inappropriate and confusing to
introduce public law concepts of vires into the private law tort of negligence.165 A

161
Three Rivers District Council v Governor and Company of the Bank of England [2000]
UKHL 33, [2003 2 AC 1.
162
B Harris, “Judicial Review, Justiciability and the Prerogative of Mercy” (2003) 62
Cambridge Law Journal 631.
163
[1970] AC 1004. The tests, which are set out below, were originally intended to be
cumulative.
164
[1970] AC 1004 at 1031. In X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at
736 the reference was to the judicial review notion of irrationality or Wednesbury
unreasonableness. “Irrational” decisions are those that are so arbitrary that they defy logic
and reason.
165
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 736; discussed in D
Fairgrieve, “Pushing back the Boundaries of Public Authority Liability: Tort Law Enters the
Classroom” [2002] Public Law 288, 298.

35
 more substantive point, meanwhile, was that it would seriously restrict the reach
of negligence liability if courts were to confine themselves to scrutinising only
those decisions which were so “grossly delinquent”166 as to be illegal. Perhaps in
response to such criticisms, the House of Lords now appears to disfavour the
ultra vires test.167

3.125 According to another test, the House of Lords held that a claim in negligence
would be justiciable only if brought against a public body’s “operational”
decisions. “Policy” decisions, on the other hand, would be entirely immune from
judicial scrutiny.168 It was said that “policy” decisions were those which “involve
discretionary decisions on the allocation of scarce resources or the distribution of
risk”.169 Operational decisions, on the other hand, were those which simply
involved the practical execution of some higher policy.

3.126 The premise of this formulation of justiciability was that courts ought not to
interfere with policy decisions because they involve “a series of interlocking
considerations, affecting a wide range of interests” and are likely “to reflect the
outcome of democratic processes”.170 On the other hand, nothing should
preclude courts from scrutinising operational decisions: they are simply practical
implementation steps and do not in themselves involve the formulation of
discretionary government policy. However, this policy/operation distinction has
proven difficult to apply in practice.

3.127 Courts have struggled to articulate workable criteria for determining what should
and should not be justiciable. The most that can be said under the current state
of law is that certain matters are deemed “unsuitable for judicial determination”
and that these are revealed on a rather unpredictable, case-by-case basis.
Having adopted and then rejected various “tests”, courts now appear to be
moving towards a broader and more purposive approach to determining
justiciability, whereby the court asks whether a case involved issues the courts
are “ill-equipped and ill-suited to assess” or in relation to which “the court… has
171
no role to play”.

166
The expression is that of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County
Council [1995] 2 AC 633 at 761. See generally C Booth and D Squires, The Negligence
Liability of Public Authorities (2006) para 2.49.
167
Barrett v Enfield London Borough Council [2001] 2 AC 550; Phelps v Hillingdon London
Borough Council [2001] 2 AC 619.
168
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 737; see also the earlier
decision in Anns v Merton London Borough Council [1978] AC 728.
169
Rowling v Takaro Properties Ltd [1988] AC 473 at 501B.
170
C Booth and D Squires, The Negligence Liability of Public Authorities (2006) paras 2.32 to
2.33.
171
Barrett v Enfield London Borough Council [2001] 2 AC 550 at 580 and 571 (Lord Hutton
and Lord Slynn respectively).

36
 2. Duty of care
3.128 Assuming that a claimant is able to satisfy the court that the claim does not raise
matters which should be considered non-justiciable, then he or she must proceed
to establish the routine elements of an action in negligence, starting with the duty
of care requirement.

3.129 The requirement of duty of care has its historical origins in the notion of
neighbourhood.172 In Caparo v Dickman,173 the House of Lords laid down three
conditions for determining when a duty of a care is owed. These are:

(1) The defendant must have been able to foresee that his or her
carelessness would have caused the claimant to suffer injury of the kind
complained of;

(2) There must have been a relationship of “proximity” between the

defendant and the claimant; and

(3) It must be “fair, just and reasonable” for the law to impose a duty of care
on the defendant in respect of the claimant.

3.130 This tri-partite test constitutes the backbone of the law on duty of care. It forms
part of general negligence theory and applies equally in cases implicating public
and private defendants alike. While the Caparo test has provoked considerable
debate in its own right, its application in relation to public body defendants has
proven particularly problematic. We shall now focus on these particular problems.

FORESEEABILITY
3.131 A defendant will be held to owe a duty of care to a claimant only insofar as the
defendant could be reasonably expected to have foreseen that a failure to take
care would cause the claimant damage. It is not necessary for the defendant to
have foreseen the precise manner in which the loss would have occurred, but he
or she must have been able to contemplate the broad nature or kind of injury
suffered by the claimant.

PROXIMITY
3.132 The notion of “proximity” refers to the closeness of connection between
defendant and claimant. To this extent, it depends largely upon an analysis of the
relationship of the parties to one another.

Proximate relationships
3.133 It is readily accepted that “proximity” is established in certain kinds of relationship,
such as employer/employee, doctor/patient, and teacher/pupil.174 More generally,
proximity will also be established where a defendant has assumed special
responsibility towards the claimant. The assumption of responsibility may be

172
Donoghue v Stevenson [1932] AC 562.
173
Caparo Industries plc v Dickman [1990] 2 AC 605. The case concerned liability for
economic loss, but the conditions have subsequently been treated as being of general
application.
174
C Baker, Local Government Liability Law (2007) para 2.52.

37
 express, such as between a police authority and its informants,175 or implied from
the defendant’s conduct, for example, attending to a collapsed person but not
calling for medical assistance.

3.134 In cases of assumed responsibility, a duty of care may arise depending upon the
application of the Caparo test.176 These cases often involve contractual
relationships or relationships close to contract. In such relationships, it is easy to
see that one party has assumed a special responsibility to take reasonable care
not to harm the other party.

3.135 In private law, courts have employed the notion of proximity as a control
mechanism for limiting a defendant’s exposure to liability where the relationship is
not considered contractual or near contractual. It is thought that it would be
undesirable if an individual could be held to owe a duty of care to a potentially
very large class of persons and in respect of loss which is widely dispersed and
indeterminate. In such cases, the liability to compensate may be well out of
proportion to the degree of the defendant’s fault, and it might be considered more
equitable to leave the loss distributed among many than to shift it, potentially
ruinously, to a single individual.

3.136 By contrast, it is not immediately apparent that these reasons apply with the
same force where the defendant is a public body. By their very nature, public
bodies come into contact with the general population on a daily basis. They
frequently enjoy extensive legal powers in respect of large sections of society,
who entrust them to discharge their public functions competently. State
intervention, whether in providing public welfare or in regulating private
enterprise, is pervasive and it can affect the most intimate aspects of citizens’
lives. Moreover, the fact that public bodies typically act in the public interest is a
ground for distinguishing them from private individuals, who may generally (within
limits) pursue their own self-interest in relation to other citizens with whom they
do not have any voluntary relationship. For these reasons, it may be that the
notion of “proximity”, in so far as it requires a contractual or near contractual
relationship, is inapt, or simply superfluous, as a criterion for determining liability
in the citizen/state context.

3.137 Case law demonstrates that reliance on “proximity” as a formal pre-condition to

establishing a duty of care leads to results which are inconsistent and
unpredictable and in some cases unjust. For example, the Home Office may
negligently release a dangerous offender into society who then commits a crime.
It has been held that there is not sufficient “proximity” between the victim and the
Home Office to establish a duty of care.177 A similar problem may arise where
police officers persistently neglect valid requests for special protection by a
prosecution witness and that witness is subsequently murdered.178

175
Swinney v Chief Constable of Northumbria [1997] QB 464.
176
Carty v London Borough of Croydon [2005] EWCA Civ 19, [2005] 1 WLR 2312.
177
K v Secretary of State for the Home Department [2002] EWCA Civ 775, (2002) 152 NLJ
917.
178
See Van Colle v Chief Constable of the Hertfordshire Police [2007] EWCA Civ 325
(Admin), [2007] 1 WLR 1821 at [9].

38
3.138 By contrast, other cases have seen the concept of “proximity” being strained in
order to impose a duty of care. For example, it has been held that the National
Dock Labour Board, whose broad statutory remit included catering for the
“training and welfare” of dock workers, did enjoy a sufficiently proximate
relationship vis-à-vis the workers even whilst they were employed by registered
private employers.179

“FAIR, JUST AND REASONABLE”

3.139 Particular difficulties arise when considering whether it is “fair, just and
reasonable” to impose a duty of care on a public body. The starting point is that
“the public policy consideration which has first claim on the loyalty of the law is
that wrongs should be remedied and that very potent counter considerations are
required to override that policy”.180 The “counter considerations” which public
body defendants have traditionally invoked were enunciated by Lord Browne-
Wilkinson in X (Minors) v Bedfordshire County Council.181 The question in that
case was whether or not it would be “fair, just and reasonable” to impose a duty
of care on a local authority in respect of its failure to intervene and admit children
into care who had suffered neglect and abuse at home. It was considered that a
number of factors militated against a duty of care and these have subsequently
been discussed in a variety of contexts.

The multi-disciplinary and delicate nature of administrative decision-making

3.140 Several of the reasons given in the Bedfordshire case for denying a duty of care
related to the nature of the public body’s decision. For instance, emphasis was
placed on the idea that dealing with vulnerable children was an “extraordinarily
delicate” task and, moreover, one which provided a “fertile ground in which to
breed ill feeling and litigation”.182 It was also highlighted that the decision whether
or not to remove a child was a multi-disciplinary one, involving co-operation
between social services, but also the police, education bodies and doctors.
Therefore, if a duty of care were to be imposed, this would lead to difficulties
when it came to disentangling the respective liabilities of each participant body.
Arguments of this kind are potentially applicable to other scenarios as well, such
as the assessment of special educational needs.

3.141 In subsequent decisions, however, the courts have come to accept that these
types of argument are only of limited weight in relation to the question of duty of
care.183

179
Rice v Secretary of State for Trade and Industry [2007] EWCA Civ 289, [2007] ICR 1469.
180
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 749.
181
Above at 749 to 751. These were summarised by May LJ in S v Gloucestershire County
Council [2001] Fam 313 at 329 to 330.
182
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 750.
183
For example, see Phelps v Hillingdon London Borough Council [2001] 2 AC 619 at 674
(Lord Clyde).

39
 The compatibility of a duty of care with statutory schemes
3.142 A further reason given in Bedfordshire for denying a duty of care was that it
“would cut across the whole statutory system set up for children at risk”.184 This
raises a broader point that has featured strongly in subsequent cases: to what
extent is a duty of care at common law consistent with a statutory scheme? Two
particular kinds of tensions are liable to arise.

3.143 First of all, public bodies sometimes seek to argue that no duty of care should be
imposed upon them at common law because this would conflict with their
“primary” obligations under statute. For example, it is reasoned that police
officers do not owe a duty of care to victims of crime, because that would risk
distracting them from their primary function of crime prevention.185 For the same
reasons, neither do they owe a duty of care not to cause psychiatric injury to
witnesses or suspects, because they should be entitled to interrogate them
robustly in the course of criminal investigation.186 To take a different example,
courts consider that fire services do not owe a duty of care to individual members
of the public who report a fire, because that would compromise their principal
duty “owed to the public at large to prevent the spread of fire”.187 As a final
example, courts reason that social workers do not owe a duty of care to parents
whom they wrongly suspect of child abuse. The courts have consistently held that
to impose such a duty of care would conflict with a public body’s statutory duty to
treat the child’s best interests as paramount.188

3.144 The second type of tension between statute and a duty of care arises where the
statute already provides for some kind of redress mechanism, such as a right of
appeal or a limited right to compensation. The issue here is whether the statutory
remedy should be taken as ousting a duty of care at common law, or whether
there is in fact scope for the two to co-exist.

3.145 Whilst not conclusive, the existence of an express statutory remedy has tended
to result in the courts denying a common law duty of care. For example,
decisions relating to social security, planning permission, and health and safety
inspection are regulated by specific statutory frameworks and, therefore, cannot
be challenged by way of an action framed in negligence.189 In a similar vein, it
was not considered fair, just and reasonable to impose a duty of care on the
Secretary of State in the discharge of his statutory functions under the Child
Support Act 1991, on the grounds that the statutory scheme provided substantial
184
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 750.
185
Hill v Chief Constable of West Yorkshire [1989] AC 53, confirmed in Brooks (FC) v
Commissioner of Police for the Metropolis [2005] UKHL 24, [2005] 1 WLR 1495 at [30].
186
Brooks (FC) v Commissioner of Police for the Metropolis [2005] UKHL 24, [2005] 1 WLR
1495 at [30].
187
Capital and Counties plc v Hampshire County Council [1997] QB 1004.
188
See D v East Berkshire Community Health NHS Trust [2005] UKHL 23, [2005] 2 AC 373; D
v Bury Metropolitan Borough Council [2006] EWCA Civ 1, [2006] 1 WLR 917; Lawrence v
Pembrokeshire County Council [2007] EWCA Civ 446, [2007] 2 FCR 329.
189
See respectively, Jones v Department of Employment [1989] QB 1; Ryeford Homes Ltd v
Sevenoaks District Council [1989] 2 EGLR 281 at 283; EWCA Civ 1848, [2004] 1 WLR
1881; Harris v Evans [1998] 1 WLR 1285 at 1297 to 1298; see also Martin Ltd v
Commissioners for Her Majesty’s Revenue and Customs [2007] EWCA Civ 1041, [2007]
STC 1802.

40
 protection against incompetence.190 Not only was there a statutory mechanism for
the determination of appeals relating to the assessment of child support
maintenance, the Act also made provision for interest to be paid on arrears
thereby providing some measure of “compensation” for delayed receipt of
maintenance.

3.146 One explanation for this approach is that where Parliament has already put in
place a statutory remedy there is no longer any need for the courts to create an
additional duty to compensate at common law.191 A further justification relates to
courts’ duty to respect Parliament’s intention. Statutory systems of redress have
been put in place for sound reasons of policy and complaints must be channelled
through these established routes, which were intended to be exclusive. For
example, the statutory regime governing adoption has been carefully crafted with
a view to promoting the finality and certainty of adoption orders. Permitting a
broad claim in negligence to undercut this would therefore be unacceptable.192

3.147 A potentially countervailing consideration is the adequacy or effectiveness of the

alternative remedy. In the Barrett and Phelps cases,193 the House of Lords took
the view that the availability of alternative remedies, including statutory
procedures, did not militate against a duty of care as these would not be as
“efficacious” as an action in negligence. It was only through a claim for damages
at common law that the claimant was able to obtain compensation for past as
well as future losses.194 Generally, however, it is not the adequacy of the remedy
per se, but rather Parliamentary intent which is taken to be decisive.195 This
means that the claimant will be expected to pursue the statutory remedy rather
than a common law claim even where the former is less attractive than suing in
negligence.196

3.148 The decisions on this point are difficult to reconcile and it is apparent that courts
have not yet settled on a firm position as to relationship between statutory
remedies and common law causes of action, and in particular the interplay
between Parliamentary intent and adequacy of the statutory remedy. The need
for clarification is pressing if claimants (and their legal advisers) are to know
where and by what means they are expected to seek redress.

190
Rowley v Secretary of State for Department of Work and Pensions [2007] EWCA Civ 598,
(2007) 151 SJLB 856.
191
C Baker, Local Government Liability Law (2007) para 2.101.
192
A v Essex County Council [2003] EWCA Civ 1848, [2004] 1 WLR 1881 at [42] to [43].
193
Barrett v Enfield County Council [2001] 2 AC 550 at 568; Phelps v Hillingdon London
Borough Council [2001] 2 AC 619.
194
Phelps v Hillingdon London Borough Council [2001] 2 AC 619 at 672.
195
See for example, Jones v Department of Employment [1989] QB 1; Ryeford Homes Ltd v
Sevenoaks District Council [1989] 2 EGLR 281 at 283; EWCA Civ 1848, [2004] 1 WLR
1881; Marcic v Thames Water Utilities Ltd [2003] UKHL 66, [2004] 2 AC 42.
196
The Court of Appeal has recently endorsed this as the correct approach. See Rowley v
Secretary of State for Department of Work and Pensions [2007] EWCA Civ 598, (2007)
151 SJLB 856.

41
 The risk of defensive administration
3.149 Another argument raised against imposing a duty of care is that it may cause
public officials to respond in an unduly risk averse or “defensive” manner. This
concern has been expressed in a variety of contexts. In the Bedfordshire case, it
was said that if social workers were made liable for wrong decisions in respect of
removing children at risk, then they might hesitate when it came to making such
decisions in the future. The delay would prejudice the child who was actually
being abused, as well as other children who would suffer as a result of slower
decision-making by individuals.197 To take a different example, it has been
suggested that highway authorities should not be held liable for failing to improve
road safety, lest they over-do it and thereby “debase the currency” of road safety
signs.198 Finally, it has been speculated that if local authorities were to owe a duty
of care in their supervision of building construction, then building inspectors might
be over-cautious in their enforcement of regulations and insist upon higher
standards than are actually required under the regulations. This would come at a
considerable cost to those constructing buildings.199

3.150 Arguments based on notions of over-kill or “defensive administration” have been

criticised by academic commentators on the basis that they are unsupported by
empirical evidence.200 Moreover, it has been argued that in foreign jurisdictions,
including US states, France and Germany, the presence of a legal duty to
compensate has not induced a risk averse culture.201 Meanwhile, approaching
the problem from a different angle, it has been argued that, even assuming that a
duty of care would lead to more cautious decision-making, this should be
welcomed as beneficial because it would encourage an improvement to
standards in public service.202 This area is explored further in Appendix B.

Floodgates
3.151 A further argument is that imposing a duty of care on a public body would open
the floodgates to a vast number of similar claims, many of them frivolous or
vexatious.203 The time and money expended in defending litigation would be a
waste of public resources.204 For example, if courts were to impose a duty of care

197
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 750.
198
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057
at [103]; see also Stovin v Wise [1996] AC 923 at 958.
199
See the comments by Lord Keith in Rowling v Takaro Properties Ltd [1988] AC 473 at 502,
with regards to the decision in Anns v Merton London Borough Council [1978] AC 728.
200
D Fairgrieve, State Liability in Tort (2003) pp 130 to 131; B Markesinis, Tortious Liability of
Statutory Bodies: A Comparative and Economic Analysis of Five English Cases (1999) pp
81 to 82.
201
See D Levinson, “Making government pay: Markets, Politics and the Allocation of
Constitutional Costs” (2000) 67 University of Chicago Law Review 345; B Markesinis et al,
Tortious Liability of Statutory Bodies: A Comparative and Economic Analysis of Five
English cases (1999) pp 81 to 82.
202
For example, see recently D v East Berkshire Community Health NHS Trust [2005] UKHL
23, [2005] 2 AC 373 at [33] (Lord Bingham).
203
Following the decision in Phelps v Hillingdon London Borough Council [2001] 2 AC 619,
the headline in The Times of 14 May 2002 was “Schools face explosion of litigation”.
204
For example, see recently D v East Berkshire Community Health NHS Trust [2005] UKHL
23, [2005] 2 AC 373 at [137].

42
 on a financial regulator, then there is a danger that it would face many thousands
of complaints. Similarly, a duty of care imposed upon police authorities would
result in “a significant diversion of… manpower”205 away from crime fighting and
towards reopening and re-traversing closed investigations.

3.152 There is currently little empirical evidence to support or contradict these

arguments and it possible that other limiting devices would be sufficient to rein in
liability. Each claimant must still prove, on the balance of probabilities, that the
defendant breached its duty of care, that this caused him or her loss, and that this
loss is not too remote.206

3.153 In summary, the weight given by courts to the above factors in assessing whether
imposing a duty of care would be “fair, just and reasonable” has varied, often
unpredictably and without adequate explanation. The rather turbulent manner in
which the case law has developed is illustrated in Part 4 with reference to certain
sectors of government action.

3. Breach of a duty of care

3.154 Provided that a claimant is able to show that his or her claim is justiciable and
that the public body owed him or her a duty of care, the next step will be to
demonstrate that the body breached that duty. A defendant will be considered to
be in “breach” of its duty of care if it failed to meet the standard of care that could
reasonably be expected of it.207

3.155 Determining what should be the appropriate standard of care is a question of law
and it has become customary for courts to have regard to a wide range of factors.
These include the probability that the defendant’s activity would have injured the
claimant; the severity of the loss which the claimant would suffer should the risk
posed by the defendant materialise; and the cost to the defendant of eliminating
the risk. Two further considerations are of particular relevance in relation to public
body defendants and so merit special attention.

3.156 First of all, when setting the standard of care, it will be relevant to take into
account whether and the extent to which the defendant’s activity is undertaken in
the public interest.208 Courts are wary of imposing a standard of care which is
excessively high. For instance, it has been said that although running trains at no
more than five miles per hour may entail a lesser risk to health and safety, “our
national life would be intolerably slowed down as a result. The purpose to be
served, if sufficiently important, justifies the assumption of abnormal risk”.209 In a
similar vein, section 1 of the Compensation Act 2006 now formally provides that,
where a defendant undertakes a “socially useful” activity, the court is entitled to
take account of this by adjusting the standard of care as it sees fit.

205
Hill v Chief Constable of West Yorkshire [1989] AC 53, at 63 (Lord Keith of Kinkel).
206
Phelps v Hillingdon London Borough Council [2001] 2 AC 619 at 667 (Lord Clyde); B
Markesinis, Tortious Liability of Statutory Bodies: A Comparative and Economic Analysis of
Five English Cases (1999) pp 81 to 82.
207
Bolam v Friern Hospital Committee [1957] 1 WLR 582 at 585.
208
Bolton v Stone [1951] AC 850.
209
Daborn v Bath Tramways Motor Co [1946] 2 All ER 333 at 336.

43
3.157 Secondly, courts have traditionally applied a carefully modulated standard of
review when scrutinising the actions of defendants who are accused of
professional negligence. In such cases, the relevant question is simply whether
the defendant “failed to act in accordance with a practice accepted at the time as
proper by a responsible body of persons of the same profession or skill”.210 This
approach has been justified on the basis that courts do not possess the technical
expertise necessary to scrutinise to a fine degree the defendant’s professional
judgment.211 It is important to acknowledge that most claims for damages brought
against public bodies for careless exercise, or non-exercise, of a statutory power,
will involve allegations of professional negligence212 and will, as such, be subject
to the more appropriate standard of review.

4. Causation
3.158 The third element a claimant must establish to prove negligence is that the
breach of the duty caused the claimant loss or damage. In particular, the claimant
must be able to establish that:

(1) the defendant’s conduct did in fact result in the damage of which he
complains; and

(2) the damage is not in law too remote a consequence of the defendant’s
wrongdoing.213

3.159 The courts have often resorted to using the “but for” test to assess causation.
That is, the court asks whether the loss would have been suffered by the claimant
but for the defendant’s negligence. It has been suggested that this test cannot be
mechanically applied to every instance, and is therefore limited by the concept of
foreseeability.214

210
Carty v London Borough of Croydon [2005] EWCA Civ 19, [2005] 1 WLR 2312 at [26],
applying Bolam v Friern Hospital Committee [1957] 1 WLR 582.
211
D Nolan, “The Reach of Breach: Breach of Duty as a Control Mechanism in Negligence”
(forthcoming), 13. A further reason is that professionals will also be held to account by their
own disciplinary or regulatory bodies. The Bolam test requires the claimant to show that a
professional defendant fell below the standard of the ordinary skilled man exercising and
professing to have that special skill and failed to act in accordance with an accepted body
of opinion.
212
Whether by social workers, educational psychologists, police officers, regulatory bodies or
civil servants.
213
A Dugdale and M Jones (eds), Clerk and Lindsell on Torts (19th ed 2006) para 2.01.
214
Overseas Tankship (UK) v Morts Dock and Engineering Co (“The Wagon Mound”) [1961]
AC 388.

44
 Liability for omissions
3.160 It is a general rule of the tort of negligence that defendants cannot be held liable
for a mere failure to act, also known as a “pure omission”.215 By way of exception,
a defendant may be held liable where it has entered into a special relationship or
undertaken responsibilities giving rise to a positive duty to act.216 The principle of
no liability for omissions has traditionally been defended on political, moral and
economic grounds:

In political terms it is less of an invasion of an individual’s freedom for

the law to require him to consider the safety of others in his actions
than to impose upon him a duty to rescue or protect. A moral version
of this point may be called the ‘why pick on me?’ argument. A duty to
prevent harm to others or to render assistance to a person in danger
or distress may apply to a large and indeterminate class of people
who happen to be able to do something. Why should one be held
liable rather than another? In economic terms, the efficient allocation
of resources usually requires an activity to bear its own costs. If it
benefits from being able to impose some of its costs on other people
… the market is distorted because the activity appears cheaper than
it really is. So liability to pay compensation for loss caused by
negligent conduct acts as a deterrent against increasing the cost of
the activity to the community and reduces externalities. But there is
no similar justification for requiring a person who is not doing anything
to spend money on behalf of someone else.217

3.161 As was the case with the notion of proximity generally, the omissions rule does
not appear to be particularly well suited to the context of state wrongdoing. First
and foremost, the rationales for a general principle of no-liability do not
necessarily apply with the same force in citizen/state relationships as they do in
relations between private individuals. The argument that a duty to act would
curtail a defendant’s autonomy disregards the fact that, where the defendant is a
public body, its freedom of action is already restricted by the limits of the mandate
conferred upon it by democratic processes. Similarly, the economic justification
for the omissions principle seems inapt. Public bodies and officials are paid to
perform certain services and it may even be economically more efficient for them
to act than for society to support the claimant’s injury. In simple terms, it is one
thing to impose upon a stranger on the beach a duty to take care to save a
drowning child; it is altogether different to impose such a duty upon a lifeguard
employed by the local authority.218 Likewise, the moral argument seems
misplaced in the context of state omissions. Often, the public body will be the
only body with the necessary legal powers to take action to prevent the claimant
from suffering harm.219 Indeed, there is a growing trend under human rights law
215
For a critique of the omissions rule generally, see P Atiyah, Atiyah’s Accidents:
Compensation and the Law (6th ed 1999) p 60.
216
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057
at [38] (Lord Hoffman).
217
Stovin v Wise [1996] AC 923 at 943 to 944 (Lord Hoffman).
218
See Indian Towing Company v US (1955) 350 US 61.
219
This is, for example, the case in relation to highway authorities who alone have power to
remove certain obstacles to improve visibility: Stovin v Wise [1996] AC 923 at 943 to 946.

45
 to impose positive duties on the state to take steps to prevent human rights
violations and to investigate such violations where they do occur.220

3.162 It could be that a more convincing justification for the omissions principle is
possible in the state liability context: in that it prevents courts from pre-empting
public officials on important questions of social policy:

The concern is that, without a distinction between acts and omissions,

the state can be held responsible for any failure to improve society.
How such improvement can best be achieved, or even what is
regarded as an improvement at all, are questions we ordinarily think
of as being best left to the political process. Precluding liability for
omission in relation to claims brought against public authorities helps
ensure that it is not the courts that are determining the benefits to
which members of the public are entitled.221

3.163 However, a further criticism of the omissions rule is that it is capable of producing
particularly unfair results. Courts have become extremely reluctant to impose a
duty of care, so much so that one senior law lord has said that it is now “difficult
to imagine a case in which a common law duty can be founded simply upon the
failure (however irrational) to provide some benefit which a public authority has a
power (or a public law duty) to provide”.222 Assuming this view reflects accurately
the current state of the law, it would appear to imply an absolute immunity from
liability for failure to exercise a legal power. It seems harsh to apply such a
blanket rule, regardless of how flagrant or ill-advised the omission by the public
body and irrespective of the severity of the claimant’s injury. Drawing on the facts
of Dytham,223 it would be harsh not to impose a duty of care where a police officer
watched a person being assaulted and took no steps to intervene.

The role of damages in tort law

3.164 If a claimant is successful in establishing negligence, then he or she will be
entitled to compensation for past and future loss in full. The overriding purpose of
awarding damages in tort law is to restore the claimant fully to the position he or
she was in prior to the commission of the tort. In practice, however, problems do
arise. Generally, losses resulting from property damage and physical injury are
recoverable, although the rules on causation and remoteness may pose
difficulties. However, recovery for certain kinds of “loss”, such as mental suffering
and what is known as “pure economic loss”, are subject to special restrictions.

220
For example, see Osman v United Kingdom (1998) 29 EHRR 245. See generally, A R
Mowbray, The Development of Positive Obligations under the European Convention on
Human Rights by the European Court of Human Rights (2004).
221
C Booth and D Squires, The Negligence Liability of Public Authorities (2006) para 3.108.
222
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057
at [32] (Lord Hoffman).
223
Dytham [1979] QB 722.

46
 COMPENSATION FOR PHYSICAL INJURY AND PECUNIARY LOSS
3.165 In principle, there is no problem in awarding damages for physical injury or
property damage which a claimant suffers as a result of the defendant’s
negligence. The general principles governing the calculation of damages do not
differ where the defendant is a public body. For various reasons, however, the
quantification of loss is not an exact science, and is frequently an imprecise
exercise in practice.

3.166 First, certain losses cannot by their very nature be quantified precisely in
monetary terms (for example, pain, suffering and loss of amenity). The guiding
principle is to award a sum that is “fair, reasonable and just” rather than to seek
to achieve perfect restitution. Some degree of consistency is maintained through
the use of tariffs and guideline bands for particular types of injury published by
the Judicial Studies Board.224

3.167 Secondly, future losses (for example, loss of earnings) are likely to be subject to
many variables. The multiplicand/multiplier method and the Ogden Tables
attempt to provide a scientific approach to calculating damages, but the resulting
figure will not necessarily be precise.225 Certain losses are inherently speculative:
for example, it is extremely difficult to predict what would be the likely effects of a
negligent assessment of a claimant’s educational needs on his or her prospects
of employment or potential earning capacity.226 It has even been queried, as a
matter of principle, whether it is “fair, just or reasonable, or in accordance with the
rational principles of distributive justice” to award compensation for loss which is
so uncertain.227 As a result, courts are likely to adopt a cautious approach to
quantification and the level of damages will be modest.228

RESTRICTIONS ON COMPENSATION FOR PURE ECONOMIC LOSS

3.168 There is a general rule that pure economic loss, that is, losses of a financial
nature that are not consequent on either physical injury or damage to property,
cannot be recovered. Examples of pure economic loss could be:

(1) when an individual buys a company for a price which is greater than the
actual value of a company as a result of a negligent audit; or

(2) the loss of income caused when a regulator negligently assesses

whether a business complies with Health and Safety standards and
prevents it from operating.

224
Judicial Studies Board, Guidelines for the Assessment of General Damages in Personal
Injury Cases (8th ed 2006).
225
The sixth edition of the Ogden Tables is available at:
http://www.gad.gov.uk/Documents/Ogden_Tables_6th_edition.pdf (last visited 16 June
2008).
226
For the approach of the courts in calculating damages, see also C Booth and D Squires,
The Negligence Liability of Public Authorities (2006) para 9.99.
227
DN v London Borough of Greenwich [2004] EWCA Civ 1659, [2005] 1 FCR 112 at [77].
228
For example, Phelps v Hillingdon [1997] 3 FCR 621 (Garland J); Liennard v Slough
Borough Council [2002] EWHC 398 (QB), [2002] ELR 527 at [167] to [172] (Henriques J);
DN v London Borough of Greenwich [2004] EWCA Civ 1659, [2005] 1 FCR 112 at [77].

47
3.169 Categorising a loss as “purely economic” can, by itself, be quite problematic.
Take the frequently used example of a local authority surveyor who negligently
approves plans for a house with insufficiently substantial foundations.229 When
this comes to light and providing the defect does not cause personal injury or
damage to another property, the loss is not regarded as property damage.
Rather, it is considered as a purely financial loss representing the cost of
rectifying the mistake and the diminution in value of the property after the defect
became apparent.230

3.170 As stated above, the general “exclusionary rule” for the tort of negligence is that
pure economic loss is not recoverable.231 This restrictive approach to pure
economic loss is the result of the change in judicial attitude marked by the
overturning of Anns v Merton232 by the House of Lords in Murphy v Brentwood.233

3.171 In light of recent case law from the House of Lords, there seem to be three
exceptions to the general rule of non-recovery for pure economic loss.234 The first
exception follows the line of reasoning that began with the case of Hedley Byrne
v Heller.235 There, the House of Lords allowed for the possibility of recovery of
pure economic loss against the defendant who negligently makes an incorrect
statement on which it is reasonable for the claimant to rely. Hedley Byrne
concerned the negligent valuation of a company by its bankers on which the
claimant advertising agency had relied before entering into a business
relationship with that company. On the company’s default, the claimants sought
recovery from the defendant bankers; the House of Lords held that there would
have been recovery but for the existence of a clear disclaimer on the statement.

3.172 Over the years the courts have applied the negligent misstatement principle in
Hedley Byrne to such situations as a negligently constructed reference such that
the individual concerned could not gain employment236 or a promise by a firm of
solicitors to carry out an action and their negligent failure to do so.237 In doing
this, the courts have developed a rationale for the recovery of pure economic loss
based on the “assumption of responsibility” test, as outlined by Lord Goff in the
case of Henderson v Merrett. That is, the defendant knew what they were doing
in making the statement and had assumed responsibility for the reasonable
reliance of the claimant on that statement. In particular, Lord Goff stated that this
assumption of responsibility “provides its own explanation why there is no
problem in cases of this kind about liability for pure economic loss; for if a person

229
This formed the background to both Anns v Merton London Borough Council [1978] AC
728 and Murphy v Brentwood District Council [1991] 1 AC 398.
230
Murphy v Brentwood District Council [1991] 1 AC 398.
231
S Deakin, A Johnson and B Markesenis, Makesenis and Deakin’s Tort Law (6th ed 2008),
p 158. See also Murphy v Brentwood District Council [1991] 1 AC 398; Caparo Industries
plc v Dickman [1990] 2 AC 605.
232
Anns v Merton London Borough Council [1978] AC 728.
233
Murphy v Brentwood District Council [1991] 1 AC 398.
234
Customs and Excise Commissioners v Barclays Bank [2006] UKHL 28, [2007] 1 AC 181.
235
Hedley Byrne and Co v Heller and Partners [1964] AC 465.
236
spring v Guardian Assurance PLC [1995] 2 AC 296.
237
Midland Bank Trust Co Ltd v Stubbs and Kemp [1995] 2 AC 145.

48
 assumes responsibility to another in the respect of certain services, there is no
reason why he should not be liable in damages in respect of economic loss which
flows from the negligent performance of those services”.238

3.173 The second possible exception occurs where a claimant is unable to prove an
“assumption of responsibility” by the defendant on the basis of the principle that
began with Hedley Byrne v Heller. Then, following Caparo v Dickman,239 it is
necessary to fulfil the general test for the expansion of tortious liability into a new
area. This means that a claimant must show “proximity”, “forseeability” and that it
is “fair, just and reasonable” to impose liability in that situation.

3.174 As a third and final alternative, if the claimant can show that there is a clear
analogy to an existing situation that has already been recognised by the courts,
then the court may allow recovery.240

3.175 In the recent case of Customs and Excise Commissioners v Barclays Bank plc,
the House of Lords revisited these exceptions, and held that they form three
separate ways in which claimants may prove that they can recover for pure
economic loss. However, none of these ways gives a conclusive answer; they are
merely indicative of where a duty may be found.241 As a result of this, where the
courts will find it possible to recover for pure economic loss is probably best
described as “uncertain”. What is clear is that there is no general test in the tort of
negligence for pure economic loss but looking over the history of cases on the
matter, it is clear that there has been an incremental expansion of liability for pure
economic loss.

Joint and several liability

3.176 English tort law incorporates a general principle of joint and several liability.242 In
short, this means that where two or more persons acting independently contribute
to the same loss, the claimant can sue any of them for the entire loss irrespective
of their actual “share” in the overall blame. The defendant who is in fact sued
then has a right to seek contribution from the other wrongdoer(s) in respect of
their pro rata share in the blame.

3.177 As discussed in Part 4, the rationale for maintaining a general principle of joint
and several liability is essentially policy-based. However, given the harsh results
that the principle of joint and several liability can produce, Part 4 considers
whether the principle should be re-evaluated.

238
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 181.
239
Caparo Industries plc v Dickman [1990] 2 AC 605.
240
Customs and Excise Commissioners v Barclays Bank [2006] UKHL 28, [2007] 1 AC 181.
241
Above.
242
The principle is well entrenched and may be traced back as far as The Bernina (1887) 12
PD 58 at 61 (Lord Esher MR).

49
 DAMAGES UNDER THE HUMAN RIGHTS ACT 1998
3.178 The Human Rights Act 1998 (HRA) came into force on 2 October 2000. Its
introduction has had two notable effects on the availability of compensation
against public bodies in English law. First, the HRA has influenced the
development of the tort of negligence at common law. Section 3 places a duty on
courts to interpret and develop domestic law in a manner compatible with the
European Convention on Human Rights (ECHR). Where a claimant’s ECHR
rights are engaged, this has arguably bolstered his or her existing claim in
negligence and has helped rebut some of the public interest arguments which
may otherwise have weighed against liability.

3.179 The second effect of the HRA has been to offer claimants a new and distinct
route to redress in certain circumstances. Section 8 creates a statutory cause of
action. This gives claimants the prospect of obtaining monetary compensation
against a public body where that body has, contrary to section 6, acted in a
manner incompatible with their rights under the ECHR.243 It is essential to note,
however, that an action for damages under section 8 HRA differs in a number of
important respects from a common law claim for damages in tort. The following
discussion will focus on the scope of section 8.

The availability of damages under section 8 HRA

3.180 Claimants who consider that their Convention rights have been infringed must
bring proceedings against the public body in the appropriate court or tribunal
generally within one year from the date on which the act complained of took
place.244 They may be granted such relief or remedy as is considered just and
appropriate by the court.245 Importantly, the overarching concern for a court when
deciding upon a remedy should be to bring to an end the human rights violation.

3.181 An award of monetary compensation for a breach of Convention rights does not
follow as of right as it does in a negligence action. On the contrary, damages are
awarded only exceptionally rather than as a rule. The court should not award
damages unless they are “necessary to afford just satisfaction”, having regard to
all the circumstances including any other relief or remedy given.246 This test
mirrors the approach adopted by the European Court of Human Rights247 and
English courts must take into account the principles in Strasbourg case law.248

3.182 The other point to note about the availability of damages under section 8 is that
where a court does decide to award damages, it should not seek to imitate the
approach to quantification adopted in negligence. Rather, the correct approach to
calculating damages is that developed by the European Court of Human Rights

243
Defined in section 1 of the Act, and includes articles 2 to 12 and 14 of the Convention,
articles 1 to 3 of the First Protocol and articles 1 and 2 of the Sixth Protocol as read with
articles 16 to 18 of the Convention.
244
Human Rights Act 1998, s 7(1) and (5).
245
Human Rights Act 1998, s 8(1).
246
Human Rights Act 1998, s 8(3).
247
European Convention on Human Rights, Art 41.
248
Human Rights Act 1998, s 8(4).

50
 over the past fifty years.249 The applicable principles were considered by the Law
Commission and the Scottish Law Commission in a detailed review250 and, more
recently, by the House of Lords and the Court of Appeal.251

3.183 In particular, applicants should, as far as possible, be returned to the same

position as if their Convention rights had not been violated and some regard
should be had to manner in which the violation took place.252 The purpose of
incorporating the ECHR into domestic law via the HRA “was not to give victims
better remedies at home than they could recover in Strasbourg but to give them
the same remedies without the delay and expense of resort to Strasbourg”.253
Whereas at common law damages are quantified by reference to general
brackets or guidelines, under section 8 HRA the level of compensation remains
discretionary – it should be no more than is “equitable” in the circumstances.254 It
is notable that compensation for non-pecuniary losses in particular remains
modest and involves an explicit balancing exercise between the need to ensure
respect for human rights and the need to recognise that public resources are
limited.255 There is little doubt that the courts’ awareness of public finances has
had a tempering effect on the levels of compensation.

The application of section 8 HRA

3.184 Presenting a claim for damages under section 8 HRA presupposes that the
claimant is able to demonstrate that there has been breach of his or her
Convention rights. The HRA does not provide a domestic remedy where none
would have been available in the European Court of Human Rights.256 In practice,
the Convention rights which are invoked most commonly are the right to life
(article 2); the right not to be subjected to inhuman and degrading treatment
(article 3); the right to liberty and security (article 5); the right to a fair trial (article
6); the right to private and family life (article 8); and the right to peaceful
enjoyment of one’s property (Protocol 1, article 1).

3.185 In certain respects, section 8 HRA may be seen as going further than the
common law. For example, it is well established that a police authority which fails

249
Human Rights Act 1998, s 3 expressly requires English courts to have regard to
Strasbourg principles, not domestic precedents.
250
Damages under the Human Rights Act 1998 (2000) Law Com No 266; Scot Law Com No
180, http://www.lawcom.gov.uk/docs/lc266.pdf.
251
See respectively R (Greenfield) v Secretary of State for the Home Department [2005]
UKHL 14, [2005] 1 WLR 673; and Anufrijeva v London Borough of Southwark [2003]
EWCA Civ 1406, [2004] QB 1124.
252
Anufrijeva v London Borough of Southwark [2003] EWCA Civ 1406, [2004] 2 QB 1124 at
[67] to [70].
253
R (Greenfield) v Secretary of State for the Home Department [2005] UKHL 14, [2005] 1
WLR 673 at [19].
254
Anufrijeva v London Borough of Southwark [2003] EWCA Civ 1406, [2004] QB 1124 at
[60].
255
Above at [75]: “Resources are limited and payments of substantial damages will deplete
the resources available for other needs of the public including primary care”.
256
R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs (No 2)
[2005] UKHL 57, [2006] 1 AC 529.

51
 to catch a killer owes no duty of care in negligence to the murderer’s victim.257 By
contrast, a claim for compensation is possible under section 8 HRA, on the basis
of violations of articles 2 and 8 ECHR. Damages are available in respect of
losses suffered by the victim and the victim’s parents.258

3.186 Similarly, a local authority which persistently fails to provide a disabled person
with appropriate accommodation may be liable to pay him or her compensation
under section 8 HRA, on the basis that it has breached that person’s rights under
article 8 ECHR.259 By contrast, had that person brought a claim in the tort of
negligence, it would probably have failed given the reluctance of courts to impose
a duty of care in respect of a failure to confer a benefit.

3.187 It may thus be tempting to see in section 8 HRA a means of remedying some of
the shortcomings in the coverage of judicial review and tort law. However,
Section 8 was not intended to be a sweeping-up mechanism and, as such, it can
at best provide only an imperfect remedy for deficiencies in the common law. Not
only is compensation under the HRA discretionary, but section 8 also puts great
pressure on claimants to tie their actions to one of the rights explicitly
enumerated in the HRA.

DAMAGES UNDER EU LAW

3.188 A person may recover compensation from any organ of a member state where it
has breached a rule of EU law. In its decision in Francovich,260 the European
Court of Justice identified three conditions which have to be satisfied before
liability may be established:261

(1) The rule of EU law breached must have been intended to confer rights
upon the individuals;

(2) The breach must be “sufficiently serious”; and

(3) There must be a direct causal link between the breach and the damage
sustained by the individuals.

3.189 In practice, the first and third conditions have caused little difficulty for claimants.
It is the second requirement which has proven the most common ground for
dismissing claims.

257
See also Hill v Chief Constable of West Yorkshire [1989] AC 53, confirmed in Brooks v
Commissioner of Police for the Metropolis [2005] UKHL 24, [2005] 1 WLR 1495 at [30].
258
Van Colle v Chief Constable of the Hertfordshire Police [2007] EWCA Civ 325, [2007] 1
WLR 1821.
259
R (Bernard) v Enfield London Borough Council [2002] EWHC 2282 (Admin), [2003] HRLR
4, approved in Anufrijeva v London Borough of Southwark [2003] EWCA Civ 1406, [2004]
QB 1124.
260
Joined Cases C-6/90 and C-9/90 Francovich and Bonifacti v Italy [1991] ECR I- 5357.
261
Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v Federal Republic of
Germany and R v Secretary of State for Transport ex parte Factortame Ltd [1996] ECR I-
1029, [1996] QB 404, para 74.

52
3.190 The test for determining a sufficiently serious breach is whether the member state
“manifestly and gravely disregarded the limits on its discretion”, rendering the
breach “inexcusable”.262 Particular regard is had to factors such as:

The clarity and precision of the rule infringed, whether the

infringement and the damage caused was intentional or involuntary,
whether any error of law was excusable or inexcusable, and the fact
that the position taken by a Community institution may have
contributed towards the adoption or maintenance of national
measures or practices contrary to Community law.263

3.191 The discretion afforded to the defendant will be highly relevant. Where the
Member State has little or no discretion in the implementation of an EU directive,
mere infringement may qualify in itself as a sufficiently serious breach.

3.192 The use of the “sufficiently serious” breach test as a control mechanism has not
escaped comment and parallels have been drawn with the inquiry in English law
into whether or not a duty of care has been breached.264 In practice, it has proven
extremely difficult for claimants to overcome the “sufficiently serious” hurdle.

3.193 Where a claimant is able to establish liability, the amount of compensation

awarded must be in accordance with national law on liability and must not be
“impossible or excessively difficult to obtain”.265 It must be commensurate with the
loss or damage sustained and may include an award of exemplary damages.266
Yet there remains a requirement that the claimant show that he or she had taken
reasonable care to avoid the loss or damage or to mitigate it.267 For example, if a
Community provision had direct effect, the claimant would be expected to bring
proceedings in the national court to have his rights vindicated: he could not
simply remain inactive and then later claim damages for the state’s failure to
comply with EU law. To that extent, the claim for damages might be described as
“residuary”.268

262
Above, para 55.
263
Case 424/97 Haim v Kassenzahnarzliche Vereinigung Nordrhein [2000] ECR I-5123, para
43. A persistent breach by the member state, despite a ruling to the contrary from the
European Court of Justice, is likely to amount to a serious breach.
264
See Craig, “Once More Unto the Breach: The Community, the State and Damages
Liability” (1997) 113 Law Quarterly Review 67, 94; M Andenas and D Fairgrieve,
“Sufficiently Serious?” in M Andenas (ed), English Public Law and the Common Law of
Europe (1998); and Allison, “Transplantation and Cross-fertilisation in European Public
Law” in J Beatson and T Tridimas (eds) New Directions in European Public Law (1998),
169.
265
Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v Federal Republic of
Germany and R v Secretary of State for Transport ex parte Factortame Ltd [1996] ECR I-
1029, [1996] QB 404.
266
Above.
267
Above, para 84.
268
P Craig and G De Burca, EU Law Text, Cases and Materials (4th ed 2008) p 341.

53
 PART 4
LIABILITY IN PUBLIC AND PRIVATE LAW

INTRODUCTION
4.1 Building on the work of Part 3, Part 4 considers some of the limitations inherent in
the current system and suggests options for reform. This is done whilst
recognising the special nature of public bodies, particularly the multifaceted
burdens placed on them as providers of public services.

4.2 Part 4 draws on our analysis of the “modified corrective justice” principle. This
principle suggests that where an aggrieved citizen cannot obtain just redress for
substandard administrative action through alternative, non-court based
mechanisms, they should be able to access the courts to obtain redress, within
certain parameters.

4.3 These parameters are expressed as a package that attempts to balance the
interests of aggrieved claimants against the danger that liability might create an
undue burden on resources. The consequence of this is to modify the availability
of damages in judicial review and create more certainty and predictability in the
tortious liability of public bodies.

4.4 In judicial review, it is suggested that damages should be available as a remedy

alongside the prerogative remedies where the administrative decision involved
“serious fault” and where the claimant suffers loss. This would essentially
harmonise the system with that which already exists for a “sufficiently serious”
breach of EU law.

4.5 In tort, a similar “serious fault” scheme would apply to the sphere of public action
that can be described as “truly public”. Action undertaken by public bodies that is
not “truly public” would be subject to the ordinary law of tort. It is not proposed
that our suggested scheme would replace the current regime in areas such as
medical negligence. Within the “truly public” sphere the tortious standard of
negligence would be replaced by a higher standard of “serious fault”.

4.6 Within both of these schemes, potential liability would only be imposed where it
could be demonstrated that the relevant legal regime “conferred” a benefit on the
claimant. Furthermore, the package would entail modifying the blanket rule on
joint and several liability in this area of public body liability.

4.7 Lastly, if any change is to simplify the area, then it may be necessary to abolish
the action for misfeasance in public office and significantly limit the ambit of
breach of statutory duty as it applies to public bodies.

4.8 This Consultation Paper puts forward these proposals in the context of
encouraging a real debate on the issues. We invite responses on all aspects of
our proposals as well as on the underlying factors to be considered in any
proposed reform of this area.

54
 UNDERLYING PRINCIPLES
4.9 In Appendix A, we outline a principle of “modified corrective justice”. This is the
principle on which to base the liability of public bodies in those residual cases that
require the court’s attention. To summarise our conclusions in Appendix A:

(1) In general, the principle of corrective justice underpins the relationship

between the state and individual claimants;

(2) However, in certain circumstances the normal principle of corrective

justice needs to be modified. This is in order to take into account certain
features of the relationship between the state and potential claimants;

(3) In relation to monetary compensation, the relationship between the state

and an individual claimant has a different moral complexion to the
relationship between private individual claimants;

(4) An individual’s relationship with and expectations of the state are such
that they should look first to non-monetary remedies against the state;

(5) However, where compensation is in issue, there is a moral case for

limiting it to particularly serious conduct where the state is the
respondent;

(6) This modification only applies where the state is undertaking “truly public”
activity. Therefore, it does not apply where the impugned activity could
equally have been carried out by a private individual.

4.10 We draw on these principles of “modified corrective justice” throughout this Part,
as they provide the backdrop to the development of the options for reform.

4.11 That said, there are many ways to justify changes to the system, especially in
light of the current confusion and over-complication. We do not feel that our
options for reform are solely defensible by reference to any particular theory of
justice. What is clear is that, within the process of reform of public service
delivery, there should be open debate on the system through which citizens can
obtain redress for substandard administrative action.

OVERVIEW OF CURRENT PROBLEMS

4.12 This section deals with some of the problems with the current court-based
systems of redress. The focus on court-based solutions in this Part should not
suggest that we are ignoring alternative avenues of redress, including the
ombudsmen. Rather, building on the examination of those alternative redress
mechanisms in Part 3, this Part proceeds on the basis that while those avenues
will afford the possibility of redress to the vast majority of citizens, there will be a
certain number of “residual cases” that require the court’s attention.

4.13 Currently, there are certain situations where the court-based system fails to meet
the needs of both citizens and public bodies. Those deficiencies should be
remedied where possible. We are not suggesting, however, a complete revision
of the current system or a massive expansion in the damages liability of public
bodies.

55
 Public Law
4.14 At present, damages are only available in an action for judicial review in
exceptional circumstances.1 The view has traditionally been that the
Administrative Court is not the appropriate forum for an award of damages.
Certain exceptions to this rule do exist, for instance under section 8 of the Human
Rights Act 1998 or where there would have been a possible civil law damages
claim at the time that the judicial review was launched.2

4.15 Damages can also be awarded where a Member State has caused a claimant’s
loss by infringing their rights through a sufficiently serious breach of EU law.3

4.16 A situation where damages are awarded for “serious fault” in EU law but not for
“serious fault” in domestic law is clearly problematic. It means that claimants
whose action is based solely in domestic law are in a worse position with regard
to remedies than those who can found an action in EU law.

4.17 Even in these exceptional cases, an application for judicial review cannot be
launched solely for a monetary remedy.4 However, occasionally a finding of
unlawfulness in judicial review may facilitate a civil action for damages.5

Possible reasons for limitation on damages

4.18 There are three principal reasons for such a limited use of damages in judicial
review. These are worth considering in turn.

4.19 First, the Administrative Court’s supervisory jurisdiction has grown out of the
need to uphold the rule of law. As such, the emphasis has primarily been on
guarding against the objective misuse of executive power rather than on an
individual’s claim for reparation. In seeking to achieve this primary aim, it has
traditionally been thought that compensation is not a necessary part of the rule of
law. This contrasts with other jurisdictions where compensation is seen as an
integral part of ensuring the proper functioning of the rule of law. For instance, in
EU law, one of the principal justifications for allowing individuals to recover

1
Three Rivers District Council v Bank of England (No 3) [2003] AC 1 at 229. See further H
Woolf, J Jowell and A Le Sueur, De Smith’s Judicial Review (6th ed 2007) ch 19,
especially para 19-025 and following.
2
Civil Procedure Rules r 54; Supreme Court Act 1981, s 31(4).
3
The test is outlined in Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v
Germany and R v Secretary of State for transport ex parte Factortame (No 3) [1996] ECR
I-1029. The original concept was developed by the ECJ in Joined Cases C-6/90 and C-
9/90 Francovich and Bonifaci v Republic of Italy [1991] ECR I-5357. The action is still
sometimes referred to as “Francovich damages”.
4
Civil Procedure Rules r 54.3(2).
5
For example, in Re McC (A Minor) [1985] AC 528, a detention order which was quashed in
judicial review proceedings paved the way for a claim for damages in a civil action based
upon the tort of false imprisonment. See also R v Governor of Brockhill Prison ex parte
Evans (No 2) [2001] 2 AC 19.

56
 damages from a Member State which breaches EU law is to ensure the full
effectiveness (l'effet utile) of EU norms.6

4.20 Secondly, the Administrative Court does not provide an obvious forum for the
resolution of complex issues of fact. Most evidence is in the form of written
statements and the cross-examination of witnesses remains rare.7 Consequently,
the court may find it difficult to determine issues of liability involving an
examination of complex factual issues such as fault, causation and the
assessment of damages. There are fears that such fact-finding exercises would
place an undue burden on the already overwhelmed Administrative Court.

4.21 The Administrative Court does however have an array of powers at its disposal to
deal with matters of a factual nature; it has just made limited use of them. The
limited use of fact-finding procedures flows from the idea that judicial review is a
review of legality rather than an appeal on the merits of a particular decision. That
said, it is recognised that “the courts have always shown themselves adept in
altering their procedures to accommodate new challenges”.8 The determination of
monetary claims would simply require the court to make appropriate orders to
that end.

4.22 We are aware that there is a widespread perception that the Administrative Court
is already seriously over-burdened. A number of measures are currently being
considered to address these concerns.9 A judicial working group, reporting in
November 2007, has recommended that the Administrative Court sit in four
regional centres outside London. Its recommendations have been met with
considerable support.10 Steps are also being taken to increase the number of
judges sitting in the Administrative Court, and a further working group reviewing
the handling of immigration and asylum work in the higher courts is due to report
at the end of April 2008.

4.23 Finally, it could be argued that a change to the availability of damages for invalid
administrative action could create an excessive burden on public bodies and
inhibit them in the discharge of their public functions.11 This is the traditional
“floodgates” argument, and is dealt with more comprehensively in Appendix B.

6
D F Warlbroeck, “Treaty violations of member states: the effect of the Francovich case
Law” in T Heukels and A McDonnell (eds), The Action for Damages in Community Law
(1997) 311, pp 315 to 316.
7
See eg R v Institute of Chartered Accountants in England and Wales ex parte Andreou
(1996) 8 Admin LR 557 at 562 to 563; C Lewis, Judicial Remedies in Public Law (2nd ed
2000) para 9.112.
8
D v Home Office [2005] EWCA Civ 38, [2005] All ER 253 at [130].
9
See the Government’s response to concerns about the delays in the Administrative Court
http://www.publiclawproject.org.uk/documents/TsolLetter08-03-04_000.pdf (last visited 16
June 2008).
10
Justice outside London: Report of judicial working group (November 2007), available at
http://www.judiciary.gov.uk/publications_media/judicial_views_responses/justice_outside_l
ondon/index.htm (last visited 16 June 2008).
11
P Craig, Administrative Law (5th ed 2003) p 938; C Harlow, State Liability – Tort Law and
Beyond (2004) pp 88 to 123.

57
 CONFLICT WITH THE UNDERLYING PURPOSE OF JUDICIAL REVIEW?
4.24 Professor Cane has pointed out that, in judicial review, the supervising court does
not substitute its decision for that of the public body; rather it leaves it to the body
to make good its illegal behaviour by making a fresh decision which complies with
the requirements of the law. To award damages would be in a sense to substitute
a decision for that of the public body, and may therefore be incompatible with the
theory of judicial review as it cannot be reconciled with the idea that the ultimate
decision must usually be left to the public body.12

4.25 However, in practice, the court can often conclude that the decision taken was
one not lawfully open to the decision-maker. If the court can so conclude, we do
not see any reason why it cannot award compensation if the applicant has
suffered resulting loss. In those circumstances, it would be for the public body to
show that the decision was lawfully open to it.13

4.26 In this context, it is also worth considering recent developments in judicial review.
The Tribunals, Courts and Enforcement Act 2007 extends the power of the High
Court with regard to quashing orders. Section 141 allows the High Court to
substitute its own decision for the decision of a court or tribunal where there has
been an error of law, if it is satisfied that without the error there would have been
only one decision that the court or tribunal could have reached.

Criticisms of limited availability of damages

4.27 Despite these possible justifications for a restrictive approach to damages in
judicial review, there is an increasing tendency amongst judges14 and
commentators15 to view the current situation as problematic. As Cane has put it:
“the absence of a right of damages for losses sustained as a consequence of
public law wrongs is widely recognised as one of the most serious of the
remaining gaps in our remedial system. It is a gap that does not exist in more
developed systems”.16

4.28 Examples drawn from decided cases illustrate the potential injustice that the
current situation can cause. For instance, a local authority may wrongfully refuse
a claimant a licence to operate as a taxi driver, thereby causing them
considerable loss of income. Whilst the individual who was refused the licence
would be able to challenge the refusal through judicial review, they would not be

12
P Cane, Administrative Law (4th ed 2004) pp 95 to 97.
13
For example AK (Afghanistan) v Secretary of State for the Home Department [2007]
EWCA Civ 535.
14
See R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs
[2003] EWHC 1743 (Admin), [2003] ACD 96 at [44]. In their extra-judicial capacities, see: H
Woolf, Protection of the Public – A New Challenge (Hamlyn Lectures, 1989) p 57; R
Carnwath, “The Thornton Heresy Exposed: Financial Remedies for Breach of Public
Duties” [1998] Public Law 407, 418 and 422.
15
Report of the Committee of the Justice-All Souls Review of Administrative Law in the
United Kingdom, Administrative Justice: Some Necessary Reforms (1988), p 364; M
Fordham, “Reparation for Maladministration: Public Law’s Final Frontier” (2003) 8 Judicial
Review 104; P Cane, “Damages in Public Law” (1999) 9 Otago Law Review 489, 505.
16
P Cane, “Remedies Available in Judicial Review Proceedings” in D Feldman (ed) English
Public Law (2004) 915, p 949.

58
 able to recover lost earnings.17 Taking a different example, where the
government issues an order restricting the movement of a farmer’s cattle and this
decision is subsequently discovered to be flawed, the farmer cannot recover
compensation “even though [he has] suffered substantial financial loss”.18 A final
example could be where an individual is erroneously placed on a child abuse
register, with the result that they lose their employment. In such a case, a judicial
review would be brought challenging the decision to place the individual on the
register. However it would be difficult, through judicial review, to claim the lost
earnings.19

4.29 Many of the criticisms of the current position in English law are long-standing.
The Law Commission highlighted the issues in a number of reports in the late
1960s.20 In 1988, the Justice-All Souls Review of Administrative Law
recommended legislation to create a damages remedy against public bodies,
which would provide the following:

Subject to such exceptions and immunities as may be specifically

provided, compensation in accordance with the provisions of this Act
shall be recovered by any person who sustains loss as a result of
either

(a) Any act, decision, determination, instrument or order of a public

body which materially affects him and which is for any reason
wrongful or contrary to law; or

(b) Unreasonable or excessive delay on the part of any public body

in taking any action, reaching any decision or determination,
making any order or carrying out any duty.21

4.30 Sir Robert Carnwath has observed that this was a deliberately broad formulation,
though one that could be limited by reference to the gravity of the breach and the
seriousness of the consequences.22 In the same article he goes on to highlight
the injustice inherent in a complete lack of a court-based remedy and the
inadequacy of alternative remedies, concluding that:

Where serious harm has been caused to individuals by illegal action

by public authorities, or by failure to carry out legal duties or
obligations imposed upon them for the benefit of individuals, justice
17
R v Knowsley Borough Council ex parte Maguire [1992] COD 499.
18
R (Banks) v Secretary of State for Health [2004] EWHC 416 (Admin), [2004] NPC 43 at
[117].
19
R v Norfolk County Council Social Services Department ex parte M [1989] QB 619. In this
particular case the individual did not suffer loss as they were, in fact, suspended on full
pay.
20
See Exploratory Paper on Administrative Law (July 1967) Working Paper No 13, para 8;
Administrative Law (1969) Law Com No 20, Cmnd 4059, para 9; Remedies in
Administrative Law (October 1971) Working Paper No 40, paras 147 to 148; and
Remedies in Administrative Law (1976) Law Com No 73, Cmnd 6407, para 9.
21
Justice-All Souls Committee, Administrative Justice – Some Necessary Reforms (1988)
para 11.83.

59
 demands a suitable remedy for breach. For past failures the only
effective remedy in most circumstances is monetary compensation.
As the European Court of Justice has recognised, failure to afford
such a remedy impairs the effectiveness of the law. The ombudsman
can continue to provide remedies for inconvenience and distress
caused by maladministration. Serious harm caused by illegality
requires a remedy in the courts.23

Conclusions
4.31 Our provisional view is that judicial review has developed in a way that is over
restrictive in relation to the award of damages to an aggrieved citizen. This can
lead to significant injustice to those citizens who are adversely affected by poor
decision making. Simply quashing a decision may, without more, prove an
inadequate remedy in judicial review, particularly where the claimant has suffered
significant interim losses pending judgment.24

4.32 In considering reform of this area, it seems that the traditional arguments relating
to lack of institutional capacity within the Administrative Court are not necessarily
valid. Furthermore, it is plainly anomalous that a claimant can recover damages
where a public body has breached a rule of EU law intended to confer rights on
individuals but not where the breach is of a rule of purely domestic law.

4.33 For these reasons, we consider that there is a strong case for reform with regard
to the availability of damages in public law. However, it is clear from the
discussion above that there have to be mechanisms within any system of redress
to control the extent of liability. Below we suggest ways in which liability for
damages could be controlled in the public law context.

Private Law
4.34 This section considers three important private law causes of action against public
bodies: an action in the tort of negligence, for breach of statutory duty and for
misfeasance in public office. This section aims to show that the current state of
the law neither meets the requirements of aggrieved citizens or properly
addresses the legitimate concerns of public bodies faced with seemingly ever-
expanding liability.

22
R Carnwath, “The Thornton Heresy Exposed: Financial Remedies for Breach of Public
Duties” [1998] Public Law 407, 422.
23
Above.
24
For example, see R (Quark Fishing Ltd) v Secretary of State for Foreign and
Commonwealth Affairs [2003] EWHC 1743 (Admin), [2003] ACD 96, where ship owners
alleged that the wrongful denial of a licence caused them to incur losses of £2 million. See
also Remedies in Administrative Law (1971) Law Commission Working Paper No 40,
paras 147 to 148: “no system of remedies can afford justice to the individual who has
suffered loss as a result of administrative action adverse to him unless it makes provision
for the recovery of damages”.

60
 Negligence
4.35 Following on from Part 3, this section examines the complicated way in which the
tort of negligence has developed, highlighting issues relating to the award of
damages. It also demonstrates that over time there has been an increase in the
liability of public bodies, and that this is set to continue.

DEVELOPMENT OF THE DUTY OF CARE

4.36 Government officials have for many years been liable for various tortious actions.
However, a significant milestone in standardising and expanding that liability
came with the Crown Proceedings Act 1947. This formally recognised that the
Crown could be sued like any other body.25 That said, the real sea change in
governmental liability came with the House of Lords’ judgment in Dorset Yacht v
Home Office.26

4.37 Dorset Yacht has been described as “setting the scene for a liability revolution as
great as, if not greater than, that usually attributed to Donoghue v Stevenson”.27
In imposing liability on the Home Office for damage caused by absconding
borstal boys, Lord Reid rejected public policy arguments relating to defensive
practice with the comment that “Her Majesty’s servants are made of sterner
stuff”.28

4.38 The true importance of Dorset Yacht relates to the underlying judicial policy and
the expansion of Lord Atkin’s neighbourhood principle, enunciated in Donoghue v
Stevenson. Lord Reid stated that: “I think the time has come when we can and
should say that it ought to apply unless there is some justification or valid
explanation for its exclusion”.29 This marked a move to a single formulation for
negligence and formed the basis of the policy that led to Lord Wilberforce’s
formulation of the duty test in Anns.30 Whilst this was a laudable attempt to
simplify the law of negligence, the courts came to believe that the effect on public
bodies was unduly harsh.31 Eventually there was a wholesale retreat from Anns
with the House of Lords formally overturning that decision in Murphy.32 Modern
times have seen the development of a more incremental approach, based in part
on the test outlined in Caparo.33

4.39 These changes in approach show that the underlying rationale behind liability in
negligence can change, with certain factors coming to the fore at different times.
For instance, the courts have moved between expanding the scope for redress,
and restricting it out of a concern not to put undue strain on public resources. As
25
Crown Proceedings Act 1947, s 2(1)(a).
26
Home Office v Dorset Yacht Co Ltd [1970] AC 1004.
27
C Harlow, State Liability: Tort Law and Beyond (2004) p 17.
28
Home Office v Dorset Yacht Co Ltd [1970] AC 1004 at 1033.
29
Above at 1027.
30
Anns v Merton London Borough Council [1978] AC 728.
31
BS Markesenis and S Deakin, “The Random Element of their Lordships’ Infallible
Judgment: An Economic and Comparative Analysis of the Tort of Negligence from Anns to
Murphy” (1992) 55 Modern Law Review 619-646.
32
Murphy v Brentwood District Council [1991] 1 AC 398.
33
Caparo Industries v Dickman [1990] 2 AC 605.

61
 a result, the history of the law of negligence is marked by somewhat inconsistent
and complicated development, which makes it difficult to predict accurately what
future developments are likely to occur.

4.40 In fact, and as will be shown below, there seem to be two major features of this
history that do stand out. First, that liability has expanded over time and that there
is no good reason to expect that this will not continue. Secondly, that the
expansion has occurred in a piecemeal fashion, frequently involving recourse to
the House of Lords, which has examined the negligence liability of public bodies
“in more than a dozen cases over the past 20 years”.34

4.41 The complicated nature of this expansion is illustrated below in the treatment by
the courts of particular sectors of governmental action, such as education, social
services, planning, emergency services, highways and policing.

Education
4.42 The liability of public bodies in providing education services has been a
consistently expanding field. Whilst it has long been the case that schools should
take reasonable care of pupils under their charge to prevent physical injury,35
recent years have seen the development of a new form of “educational
negligence”. Several judgments of the House of Lords and the Court of Appeal
have made it clear that there is a common law duty of care placed on schools to
assess properly the special needs of their pupils and deliver a tailored
educational programme that takes these into account.36 Other areas of potential
liability have developed where pupils are bullied37 and even when a pupil is
injured on school grounds out of regular hours.38

Social Services
4.43 The jurisprudence of the European Court of Human Rights has strongly
influenced the development of liability in the area of social services. In X v
Bedfordshire,39 the House of Lords refused to impose a duty of care to children
who suffered abuse by their parents, where a local authority had failed to fulfil its
duties under the Children Act 1989. The House of Lords held that to impose a
duty would undermine the proper function of the Act, which was to protect
children. However, after two decisions of the Strasbourg Court,40 the House of
Lords was prepared to impose liability in negligence where a local authority failed

34
D Squires, “The consequences of public authority negligence liability” (ALBA Paper 29
January 2008).
35
Williams v Eady (1893) 10 TLR 41. The duty to take care in this situation is essentially a
duty to act as any reasonable parent would. This is different to the duty placed on social
services when considering whether to remove a child from its parents.
36
See X v Bedfordshire County Council [1995] 2 AC 633, Phelps v Hillingdon London
Borough Council [2001] 2 AC 619 and Robinson v St Helen’s Metropolitan Borough
Council [2002] EWCA Civ 1099, [2002] ELR 681.
37
Bradford-Smart v West Sussex County Council [2002] EWCA Civ 7, [2002] ELR 139.
38
Kearn-Price v Kent County Council [2002] EWCA Civ 1539, [2003] PIQR 11.
39
X v Bedfordshire County Council [1995] 2 AC 633.
40
See Z v United Kingdom (2002) 34 EHRR 3 and TP v United Kingdom (2002) 34 EHRR 2.

62
 to protect children in its care.41 Courts have also been prepared to impose liability
when a child has been erroneously placed with abusive foster parents42 and
when a child has been harmed as a consequence of carelessness in
investigating whether they were being abused by their parents.43 The House of
Lords has relatively recently gone so far as to hold a school vicariously liable
where it employed a warden who sexually abused pupils because such activity
was “inextricably interwoven” with his employment.44

Planning
4.44 The negligence liability of public bodies in relation to planning issues has been an
area of contention over the past thirty years. The decision in Anns v Merton
London Borough Council45 found a local authority liable for the purely economic
losses flowing from a negligent failure to exercise its statutory power to inspect a
building’s foundations. In relation to purely economic losses caused by negligent
planning authorities, this decision was overturned by the House of Lords in
Murphy.46 Subsequently, public bodies have only been found liable in relation to
planning decisions where the body itself directly created a danger of physical
injury.47

Emergency Services
4.45 Although the Court of Appeal has previously refused to impose a duty of care on
fire brigades where they failed to extinguish a fire, there has recently been a
movement towards expanding the liability of emergency services. For example,
the courts have imposed liability where an ambulance failed to respond to a 999
call within a reasonable time due to carelessness.48 It is well established,
however, that emergency services will be liable where they directly inflict physical
harm upon a claimant, such as when they are involved in a road accident, even if
they are responding to an emergency at the time.49

Highways
4.46 The major route to establishing liability in this area has been to show that a
highway authority has failed to “maintain” a road contrary to its statutory duty
under the Highways Act 1980. However, the courts have traditionally adopted a
restrictive approach to what amounts to “maintaining” a road. The house of Lords

41
Barrett v Enfield Borough Council [2001] 2 AC 550.
42
S v Gloucestershire County Council [2001] 2 WLR 909.
43
D v East Berkshire NHS Trust [2003] EWCA Civ 1151, [2004] QB 558.
44
Lister v Hesley Hall [2001] UKHL 22, [2002] AC 215.
45
Anns v Merton London Borough Council [1978] AC 728. See also Dutton v Bognor Regis
Urban District Council [1972] 1 QB 373.
46
Murphy v Brentwood District Council [1991] 1 AC 398.
47
Kane v New Forest District Council [2001] EWCA Civ 878, [2002] 1 WLR 312.
48
Kent v Griffiths [2001] QB 36.
49
Ward v London County Council [1938] 2 All ER 341 (in relation to the fire service); Daborn
v Bath Tramways Motor Co [1946] 2 All ER 333 (in relation to the ambulance service);
Gaynor v Allen [1959] 2 QB 403 (in relation to the police).

63
 has held that this does not include providing adequate signage50 or directing that
adjacent landowners remove obstructions to visibility.51 However, the latter
decision in the case of Stovin v Wise was a 3:2 majority in the House of Lords
and has been subject to significant academic criticism.52 Consequently this
decision can be seen as vulnerable in the long term.

4.47 Other than where it can be shown that a highway authority has failed in its duty to
maintain a road, it would seem almost impossible to impose liability for an
omission by a highway authority to remedy a problem relating to a road that it did
not build.53 However, where the authority has built the highway, then the courts
have been prepared to establish a duty of care in a much wider range of
situations, such as where an authority failed to properly construct a barrier
between a motorway and a railway line.54 Additionally, the courts have imposed
liability where the authority has introduced a danger onto the road, even when the
object was not a danger when introduced and the event that made it unsafe was
an act of a third party.55

Policing
4.48 The general principle in this area has been to restrict liability on a combination of
proximity and policy grounds, so that in general there is no duty of care relating to
general policing.56 However, the courts have imposed liability where there is
some form of “assumption of responsibility” or a special relationship.
Consequently, a duty of care has been imposed where the claimant had been
acting as an informant for the police,57 or was allegedly sexually abused by a
fellow officer.58 This area is the subject of litigation in the House of Lords again at
the time that this Consultation Paper is published.59 Traditionally, it had been
thought that the Chief Constable was only responsible for the actions of an officer
when that officer had acted in a negligent manner relating to the performance of
his functions.60 However, a Chief Constable may now be liable for the actions of
an officer even if the officer acted in an unauthorised or illegal way, so long as the
action was sufficiently closely connected to their employment.61 This area is also

50
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057.
51
Stovin v Wise [1996] AC 923.
52
For example J Convery, "Public or Private? Duty of Care in a Statutory Framework: Stovin
v Wise in the House of Lords" (1997) 60 Modern Law Review 559.
53
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057.
54
Great North Eastern Railway Line Ltd v Hart [2003] EWHC 2450 (QB), [2003] All ER 506.
55
Fisher v Ruislip-Northwood Urban District Council [1945] KB 584.
56
Hill v Chief Constable of West Yorkshire [1989] AC 53, Brooks v Metropolitan Police
Commissioner [2005] UKHL 24, [2005] 1 WLR 1495.
57
Swinney v Chief Constable of Northumbria Police [1997] QB 464.
58
Welsh v Chief Constable of the Merseyside Police [1993] 1 All ER 692.
59
See para 4.52 below.
60
Makanjoula v Metropolitan Police Commissioner (1990) 2 Admin LR 214.
61
Lister v Hesley Hall [2001] UKHL 22, [2002] AC 215.

64
 subject to increasing pressure following the decision of the European Court of
Human Rights in Osman.62

The current position

4.49 This is not to suggest that all the courts have done over the past decades has
been to expand the liability of public bodies. Duties have been denied by the
courts on grounds of public policy in claims against social services departments
in respect of their child protection functions,63 education authorities in respect of
their specific statutory duties towards children with special educational needs,64 a
highway authority for failure to rectify poor visibility at a dangerous junction,65 a
housing authority in respect of a long running campaign of racial harassment by
their tenants,66 and against banking regulators,67 the police68 and the CPS.69 It
was also not considered “fair, just or reasonable” to impose a duty of care on a
classification society for a negligent survey of a vessel which resulted in the loss
of the vessel and cargo.70

The role of the European Court of Human Rights

4.50 Though in Z,71 the European Court of Human Rights modified its own approach in
Osman, it is clear that the underlying principle in Osman continues to influence
much of the jurisprudence in this area. As such, remaining blanket bans on
liability must be seen as standing, at least legally, on shaky foundations.

4.51 The other major pressure on the liability of public bodies comes from the
development of what some commentators describe as “positive obligations” on
the state to prevent harm.72 In the light of human rights jurisprudence, the
traditional reluctance to impose positive duties is breaking down, and human
rights duties may require a public body to prevent harm being caused to
individuals. Reacting to this case law, in Limbuela Lord Brown held that “time and
again these [positive or negative distinctions] are shown as false dichotomies”
and that liability should in fact depend on whether the state is “properly to be

62
Osman v United Kingdom (2000) 29 EHRR 245. This claim arose out of a failure by the
police to investigate threatening behaviour from a teacher towards on of his former pupils.
The behaviour culminated in a series of attacks resulting in the child’s father being killed
and the former pupil injured by the teacher.
63
X v Bedfordshire County Council [1995] 2 AC 633.
64
Above.
65
Stovin v Wise [1996] AC 923.
66
Hussain v Lancaster City Council [2000] QB 1.
67
Yuen Ken Yeu v Attorney General of Hong Kong [1988] AC 176 and Davis v Radcliffe
[1990] 1 WLR 821.
68
Hill v Chief Constable of West Yorkshire [1989] AC 53 and Osman v Ferguson [1993] 4 All
ER 344.
69
Elguzouli-Daf v Commissioner of the Police of the Metropolis [1995] QB 335.
70
Marc Rich and Co v Bishop Rock Marine Co [1996] AC 211.
71
Z v United Kingdom (2002) 34 EHRR 3.
72
See further S Fredman, “Human Rights Transformed: Positive Duties and Positive Rights”
[2006] Public Law 498; A Mowbray, The Development of Positive Obligations under the
European Convention on Human Rights (2004).

65
 regarded as responsible for the harm inflicted (or threatened) upon the victim”.73
The recent imposition of human rights liability on the police for failing to protect a
potential witness reflects this case law.74

The future
4.52 Whilst many cases have been unsuccessful, we believe that the long-term trend
is likely to be a continuing expansion of liability. An illustrative recent example
can be seen in the case of Smith.75 The Court of Appeal refused to strike out an
action against the police in negligence. In fact, one member of the court
commented that:

The common law and the Convention … approach the present type of
situation in a different way. [The claimant’s counsel] submitted that no
case, at any rate at appellate level, has yet considered whether the
positive obligation imposed by Article 2 on public authorities, including
the police, have or should have a relevant impact on the development
of the common law principles of negligence in this area. As it seems
to me, it is arguable that they should, on the basis that where a
common law duty covers the same ground as a Convention right, it
should, so far as practicable, develop in harmony with it; if so, the
common law may well require a re-visiting of the Hill policy
considerations, at least in the context of cases raising considerations
of the right to life. It appears to me odd that, in that particular context,
our jurisprudence can apparently acknowledge two parallel, but
potentially inconsistent, approaches to the same factual situation: (i)
the common law position, which is said to excuse the police from any
duty to do anything at all to assist someone such as Mr Smith, whose
life they knew was being threatened by an identified third party, and
(ii) the position under Article 2, under which they were arguably
required to take positive, albeit proportionate, preventive measures to
protect him.76

4.53 This decision is being appealed to the House of Lords, where it has been joined
with Van Colle.77 It is likely that the opinion of the House will be delivered during
our consultation period. Whichever way the issue is decided this time, the very
fact that it is once again before the UK’s highest court illustrates the uncertain
and unsettled nature of this area of law.

73
R (Limbuela) v Secretary of State for the Home Department [2005] UKHL 66; [2006] 1 AC
396 at [92].
74
Van Colle v Chief Constable of Hertfordshire [2007] EWCA Civ 325, [2007] 1 WLR 1821.
75
Smith v Chief Constable of Sussex Police [2008] EWCA Civ 39, [2008] All ER 48. Here the
claimant alleged that the police had been negligent in failing to arrest his former partner,
despite having sufficient evidence of the former partner’s aggressive behaviour. Whilst the
police were conducting an investigation into the situation, the claimant was attacked and
injured by his former partner.
76
Above at [45] (Rimer LJ).
77
Appeal from Van Colle v Chief Constable of Hertfordshire [2007] EWCA Civ 325, [2007] 1
WLR 1821.

66
4.54 The potential consequences of this, as the tort of negligence reacts to the
jurisprudence of the European Court of Human Rights, reach far beyond the
police and the underlying pressures could affect the liability all public bodies.

CONCLUSIONS ON DUTY OF CARE

4.55 What is clear from the discussion above is that the area is uncertain to such an
extent that it requires frequent appeal to the House of Lords. While underlying
considerations such as liability creating an undue burden for public bodies can be
determinative in some instances, they are not in others. What cannot be ignored
is that the Human Rights Act 1998 and the jurisprudence of the European Court
of Human Rights are starting to affect liability of public bodies in negligence to an
ever increasing extent and exert a distinct pressure to expand liability.

4.56 In considering how to move forward and react to the competing demands of
claimants and public bodies it is important to bear in mind the two salient issues
that come out of the above analysis:

(1) Recent history has seen an increase in governmental liability and there
seems little to suggest that this increase will halt or that the extent of
liability will decrease.

(2) The jurisprudence on the law of negligence, particularly relating to the

liability of public bodies, is complicated and uncertain to such an extent
that outcomes are difficult to predict.

4.57 It does not seem desirable to leave the system in present state. This would serve
neither the interests of public bodies nor those of claimants.

4.58 We would welcome comments on this analysis of the development of the

duty of care in relation to public bodies.

DAMAGES
4.59 There are two aspects to the assessment of damages in negligence which are
worth further consideration. The first is the availability of damages for pure
economic loss. The second is the apportionment of damages following the
modification of the general rule on joint and several liability. These two issues are
discussed in turn.

Pure economic loss

4.60 Clerk and Lindsell on Torts outline three underlying reasons for treating pure
economic loss in a more restrictive fashion than personal injury or physical
damage to property. First, pure economic loss is frequently the result of complex
human relationships where the effects of any action can be particularly
unpredictable. This contrasts with the frequently more predictable nature of
physical injury or property damage. Second, that as the relationships are
frequently freely entered into then there is greater scope for the participants to
mitigate potential losses through contract. Third, purely economic losses are
78
often seen as the natural consequence of the workings of a market. As

78
A Dugdale and M Jones (eds), Clerk and Lindsell on Torts (19th ed 2006) para 8-83.

67
 Hobhouse LJ put it: “in a competitive economic society the conduct of one person
is always liable to have economic consequences for another and, in principle,
economic activity does not have to have regard to the interests of others and is
justifiable by the actor having regards to his interests alone”.79

4.61 Many of the general concerns with the imposition of liability on public bodies arise
irrespective of the type of damage being sought. They relate to the special nature
of public bodies and their position within our society as the enforcers of the laws
of a democratic nation and the deliverers of services funded for the most part by
general and local taxation. However, it has traditionally been thought that
concerns such as floodgates, the fettering of decision-making and the creation of
heavy demands on public funds are particularly acute when it is recovery for pure
80
economic loss that is in issue.

4.62 Against this position, some of the traditional justifications for a restrictive
approach to pure economic loss per se may not be applicable in the case of
public bodies acting in certain situations. It is often hard to argue that an
individual has freely entered into a relationship with a public body. Also, there
may well be less opportunity to mitigate potential losses through contract or
insurance. A relevant example is in licensing cases where the state has used its
power, normally through legislation, to regulate an economic sector and demand
that those using it require some form of licence.

4.63 For example, in Maguire,81 the local authority unlawfully refused to issue a taxi
licence, causing the claimant to lose potential earnings. This harm suffered was
the direct result of unlawful administrative action. It is hard to see this as the
inevitable consequence of the operation of a free market and it would not be a
situation in which an individual could have successfully mitigated their loss
through contract or insurance.

Joint and several liability

4.64 The principle of joint and several liability provides that where two or more persons
acting independently contribute to the same loss, the claimant can sue any of
them for the entire loss irrespective of their actual “share” in the overall liability.
The caveat is that the defendant who is in fact sued has a right to seek
contribution from others in respect of their pro rata share in the liability.

4.65 The rationale for maintaining the general principle of joint and several liability is
essentially policy-based. It is thought that claimants should be fully compensated
for their loss, irrespective of a particular defendant’s ability to pay, and that it is
the defendants who must themselves bear the risk of each other’s insolvency.
However, it would seem that the rule of joint and several liability is capable of
producing particularly harsh results in the context of public bodies.

4.66 First, there is a risk that litigants will disproportionately target co-defendants who
are public bodies. Public bodies can be seen as defendants with “deep pockets”.

79
Perrett v Collins [1999] PNLR 77 at 84.
80
See further C Booth and D Squires, The Negligence Liability of Public Authorities (2006)
paras 3.89 and 4.07 to 4.85.
81
R v Knowsley Metropolitan Borough Council ex parte Maguire (1992) 90 LGR 653.

68
 This is particularly problematic where the private co-defendant is insolvent, as the
public body will be unable to enforce its right to contribution and will end up
bearing the entire loss.

4.67 Secondly, in certain cases the public body co-defendant may be less culpable
than the private co-defendant. One example is where citizens suffer loss because
of fraudulent conduct by third parties of which the public regulator was unaware.
The regulator will be guilty of a failure in oversight, but is less culpable than those
actually committing the fraud. This is clearly seen in Three Rivers,82 where the
claimants were seeking to recover from the Bank of England, alleging that their
loss was the result of its regulatory failure relating to the failure of a bank, BCCI.
The primary cause of the BCCI collapse was internal to BCCI itself, but there was
little to be gained by suing BCCI, since it had just collapsed. This left the Bank of
England as the “last man standing” and therefore the subject of the claimants’
action.

4.68 In this example, the inflexible application of the principle of joint and several
liability prevents any effective division of responsibility between co-defendants,
and does not reflect the fact that the public body was not principally to blame.

4.69 It is also important to consider how the principle of joint and several liability
combines with the equally inflexible principle of subrogation. Under the principle
of subrogation, an insurer who has paid the claimant for his loss as required by
the insurance contract will be able to recover in full from the public body which
may have no effective means of obtaining contribution from the party or parties
who were the central agents of the damage. This is despite the fact that the
insurer has already drawn a premium on the insurance policy.83

4.70 The principle of joint and several liability has been the subject of considerable
debate.84 Other jurisdictions, including Australia, Ireland, France and most
American states, have historically maintained a principle of joint and several
liability, but have in recent times modified it significantly, in some cases
specifically in relation to public bodies.85 This changing international climate,
coupled with the harsh consequences of an inflexible application of the rule, may
provide a strong case for saying that the orthodox position on joint and several
liability in English law needs to be carefully reconsidered.

82
Three Rivers District Council v Governor and Company of the Bank of England [2000]
UKHL 33, [2003] 2 AC 1.
83
This was the case in Dorset Yacht. See C Harlow, State Liability: Tort Law and Beyond
(2004) pp 17 to 18.
84
In 1996, the Law Commission undertook a study of the rule of joint and several liability in
civil law as a whole, but recommended that it did not merit a full law reform project:
Department of Trade and Industry Consultation Document, Feasibility Investigation of Joint
and Several Liability by the Common Law Team of the Law Commission (HMSO 1996).
85
For example, see Part 4 of the Civil Liability Act 2002 in New South Wales (“Proportionate
Liability”) and Part 3 of the Civil Liability Act 1961 in Ireland (modification of joint and
several liability in case of contributory negligence by defendant). French law maintains a
general principle of joint and several liability, except where there is a mixture of public and
private co-defendants: Deguerge in Dalloz Droit Administratif, Fasicule 830, para 83.
Meanwhile, in the US more than three-quarters of the states have enacted some kind of
reform.

69
4.71 We invite comments on the operation of joint and several liability in the
context of litigation against public bodies.

Breach of Statutory Duty

4.72 In Part 3 we consider the law relating to breach of statutory duty. In this section,
we consider two problematic consequences of the law’s development. These are
uncertainty and the restrictive nature of the tort.

UNCERTAINTY
4.73 In order to prove a breach of statutory duty, the claimant must establish that
Parliament intended the breach to be actionable in private law. The process by
which courts imply the Parliamentary intention of a particular statute lacks
transparency. This problem has been described as follows:

Unfortunately, most legislation fails to give any express guidance as

to whether an action for damages is available for its breach, and then
the courts have to decide what Parliament intended. Determining
Parliament’s intention when it has pointedly declined to express one
is something of a haphazard process. The courts look to the
construction of the statute, relying upon a number of “presumptions”
for guidance, but in practice there are so many conflicting
presumptions, with variable weightings, that it can be extremely
difficult to predict how the courts will respond to a particular statute.86

4.74 Case law has failed to enunciate a clear set of principles and to apply them
consistently. The reasoning in terms of Parliamentary intent has been criticised
as fictitious.87 Proposals have been made to apply a general default rule in favour
of liability, or against liability, which could be displaced by express statutory
wording. The Law Commission proposed the former alternative in the 1969 report
on The Interpretation of Statutes,88 whereas others have suggested the latter
solution.89 Neither reform proposal has, however, been implemented and it is
difficult to see how the tort of breach of statutory duty can develop coherently on
its current basis.

86
A Dugdale and M Jones (eds), Clerk and Lindsell on Torts (19th ed 2006) para 9.02. See
also the comment by Lord Denning MR in Ex parte Island Records Ltd [1978] Ch 122 at
134 to 135: “[Legislation] has left the courts with a guess-work puzzle. The dividing line
between the pro-cases and the contra-cases is so blurred and so ill-defined that you may
as well toss a coin to decide it”.
87
For example, see D Fairgrieve, State Liability in Tort (2003) p 40.
88
Interpretation of Statutes (1969) Law Com No 21; Scot Law Com No 11 at para 38 and
Appendix A.4. See also Cutler v Wandsworth Stadium Ltd [1949] AC 398 at 411 (Lord du
Parcq).
89
For example, see S H Bailey, “Public Authority Liability in Negligence: The Continued
Search for Coherence” (2006) 26 Legal Studies 155, 161.

70
 RESTRICTIVE APPROACH
4.75 A further criticism is that, where the defendant is a public body, courts have in
practice been extremely reluctant to hold that a statutory provision was actually
intended to confer a private law right to compensation.90 This is especially the
case where the statutory duty breached simply forms part of an overall regulatory
system or a scheme of social welfare for the benefit of the public at large.91

4.76 There are numerous examples in the case law. For example, sections 39(2) and
39(3) of the Road Traffic Act 1988 impose generic duties upon highway
authorities to promote road safety. These have been analysed by the House of
Lords as imposing broad “target duties” which were not intended by the legislator
to be enforceable by way of a private law right to sue in tort. As such, failure to
repaint a “slow” sign does not lead to liability for breach of statutory duty.92

4.77 The restrictive approach to liability was demonstrated by the House of Lords in
O’Rourke,93 where the House overturned an earlier decision by the Court of
Appeal in Thornton.94 In O’Rourke, the House of Lords held that a citizen could
not claim damages under the Housing Act 1985 where the housing authority had
failed in its clear duty to provide accommodation when a citizen is homeless.
Specifically, the court held that housing for the homeless was provided in the
“general public interest”; therefore the statute could not create a private right of
action for damages.95

4.78 The general effect of the restrictive approach is to render breach of statutory duty
close to obsolete in many areas of the law. During 2006 and 2007, there were 15
reported cases96 in which there was a successful claim for breach of statutory

90
The exception to this is in cases of breach of health and safety legislation.
91
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 731 to 732.
92
Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057
at [72] (Lord Scott); at [89] to [94] (Lord Rodger); and at [103] (Lord Brown).
93
O’Rourke v Camden London Borough Council [1998] AC 188.
94
Thornton v Kirklees Metropolitan Borough Council [1979] QB 626.
95
O’Rourke v Camden London Borough Council [1998] AC 188 at 193 (Lord Hoffmann).
96
Cases reported in the High Court and above for England and Wales only. Criminal
prosecutions for breach of statutory duty were not included. Westlaw UK search, 25 March
2008 (database used: cases; search field: subject/keyword; search term: “breach of
statutory duty”; date: between 01/01/2006 and 01/01/2008). Supplemented by LexisNexis
search, 25 March 2008 (database used: cases; search field: summary; search term
“breach of statutory duty”; judgment date: between 01/01/2006 and 01/01/2008).

71
 duty.97 Most of these claims were brought by employees against their employers
for breach of health and safety legislation. In five of the successful cases, the
respondent was a public body. In two of those cases the respondent was a local
authority, and the successful claims were in relation to highway maintenance98
and an employment matter (health and safety).99 In two cases, the relevant
respondent was a central government department (in relation to an industrial
disease claim100 and a European law issue101). In the final case, it was an NHS
Trust (in relation to an employment matter (harassment)).102

4.79 However, breach of statutory duty does provide a useful remedy in some areas,
particularly in health and safety at work. This area can be distinguished, however,
on the basis that the legislation is aimed at regulating the employment
relationship, and in this area the public body should not be treated any differently
to a private company.

4.80 Various reasons have been put forward to explain why the approach to breach of
statutory duty is restrictive. Firstly, there is the limited rationale or basis on which
courts have developed the tort. Liability is not based on considerations of justice:

The relevant question is not whether it would have been appropriate

or reasonable for Parliament to have provided a private law remedy
but whether, as a matter of construction, it actually intended to do
so.103

4.81 This is coupled with the general principle of English law that the proper role of the
courts is to ensure compliance by public bodies with their statutory duties.
Consequently, courts can reason that judicial review is sufficient to ensure this,

97
The successful cases are the following: Gravatom Engineering Systems Ltd v Parr [2007]
EWCA Civ 967; Mason v Satelcom Ltd [2007] EWHC 2540 (QB), [2007] All ER 377;
Pennington v Surrey County Council [2006] EWCA Civ 1493; PRP Architects v Reid [2006]
EWCA Civ 1119; Majrowski v Guy's and St Thomas's NHS Trust [2006] UKHL 34; Kiani v
Land Rover Ltd [2006] EWCA Civ 880; Smith v S Notaro Ltd [2006] All ER 79; Day v
Suffolk County Council [2007] EWCA Civ 1436, [2007] All ER 377; Walker v Inter-Alliance
Group plc [2007] EWHC 1858 (Ch); Eyres v Atkinsons Kitchens and Bedrooms Ltd [2007]
EWCA Civ 365; Rice v Secretary of State for Trade and Industry [2007] EWCA Civ 289;
Corr v IBC Vehicles Ltd [2006] EWCA Civ 331; Fifield v Denton Hall Legal Services [2006]
EWCA Civ 169; Wells v Mutchmeats Ltd [2006] EWCA Civ 963, [2006] All ER 401; Byrne v
Motor Insurers Bureau [2007] EWHC 1268 (QB). Other notable cases are: Barnes v St
Helens Metropolitan Borough Council [2006] EWCA Civ 1372 (a preliminary limitation
issue was resolved in favour of the claimant; the substantive claim was not discussed);
Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34 (concerned with
issues relating to damages and interest) and Gray v Fire Alarm Fabrication Services Ltd
[2006] EWCA Civ 1496 (the first respondent admitted liability, but the second and third
respondents were held to be not liable on appeal).
98
Day v Suffolk County Council [2007] EWCA Civ 1436, [2007] All ER 377.
99
Pennington v Surrey County Council [2006] EWCA Civ 1493.
100
Rice v Secretary of State for Trade and Industry [2007] EWCA Civ 289.
101
Byrne v Motor Insurers Bureau [2007] EWHC 1268 (QB).
102
Majrowski v Guy's and St Thomas's NHS Trust [2006] UKHL 34.
103
Neil Martin Ltd v The Commissioners of Her Majesty’s Revenue and Customs [2006]
EWHC 2425 (Ch), [2007] STC 823 at [71].

72
 without it being necessary to imply that Parliament intended an action for
damages.104

4.82 Secondly, it is arguable that a breach of statutory duty should not be actionable
where a public body faces difficulties in performing its statutory duties and where
the body is afforded a wide discretion.105 Although this may justify a higher fault
requirement on the part of the public body, it is not clear that it should exclude
liability altogether.

4.83 Thirdly, courts may be reluctant to hold breaches of statutory duties actionable,
as the tort of breach of statutory duty does not take into account the degree of
fault of the public body. Provided that breach of a particular statutory provision is
considered actionable in principle, then every breach of that provision leads to
liability to compensate any resulting loss. Such a situation can rightly be regarded
as excessive.

4.84 This leaves two important considerations. Allowing a right to compensation in

respect of every breach of statute, no matter how trivial or faultless, may open the
floodgates and impose an undue burden on public resources. However, the
absence of a remedy for any breach, no matter how serious or culpable, is
equally undesirable and can lead to manifest injustice.

4.85 A more balanced approach would be for the law to distinguish between those
breaches where there is no fault or only a low level of fault and those where the
fault is more serious.106

4.86 It is instructive to note that other systems of liability based upon breach of statute
adopt a more flexible approach than English law. For example, there is under EU
law a preliminary requirement that the rule breached was intended to confer a
benefit upon the claimant. In most cases, however, the European Court of Justice
considers that this condition is satisfied fairly easily and the main control
mechanism is the “sufficiently serious” nature of the breach.

4.87 In German law, liability for breach of official duty under §839 of the Civil Code
requires a claimant to show that he or she was owed an individual duty. In
France, the administrative courts have construed the notion of fault broadly to
include instances of breach of statute (violation de la loi).

104
X (Minors) v Bedfordshire County Council [1995] 2 AC 633; O’Rourke v Camden London
Borough Council [1998] AC 188.
105
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 747.
106
See Cullen v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 39, [2003] 1
WLR 1763 at [21]. Lords Bingham and Steyn considered that liability for breach of statutory
duty should in that case have been triggered by only a “serious breach”.

73
 Misfeasance in public office
4.88 As we show in Part 3, the changes to the law on misfeasance following Three
Rivers107 and Watkins108 have potentially restricted the possibility of a claimant
proving misfeasance in public office. That said, the judgment in Three Rivers did
lead some commentators to conclude that misfeasance may have a wider role to
play in controlling “abuse of discretion”.109 What is clear is that the evidential
requirement of proving malice or that an official knowingly acted in excess of his
or her powers is a particularly high barrier to successful actions.

4.89 There is a further factor to be taken into account in the context of misfeasance,
which is the political nature of the action. Public bodies are rightly concerned not
to be labelled malicious, or to be accused of having knowingly acted outside their
powers. This could lead to an overly defensive strategy on the part of public
bodies relating to the settlement of claims.

4.90 It is interesting to note that since the case of Three Rivers,110 there have only
been nine reported cases in which there has been an arguable case of
misfeasance in public office.111 These cases either involve a successful appeal
against an order to strike out a misfeasance claim or a successful appeal against
summary judgment for the defendant to a misfeasance action.112

4.91 We would welcome more data on the frequency of use of misfeasance in

public office as a cause of action, and we would welcome views as to
whether, and if so when, it remains a useful cause of action.

107
Three Rivers District Council v Governor and Company of the Bank of England [2000]
UKHL 33, [2003] 2 AC 1.
108
Watkins v Home Office [2006] UKHL 17, [2006] 2 WLR 807.
109
S Deakin, A Johnston and B Markesinis, Markesinis and Deakin’s Tort Law (6th ed 2008) p
430.
110
Three Rivers District Council v Governor and Company of the Bank of England [2000]
UKHL 33, [2003] 2 AC 1.
111
Westlaw UK search, 5 March 2008 (database used: case locator; search field: keyword;
search term: “misfeasance in public office”). Supplemented by LexisNexis search, 11
March 2008 (database used: cases; search field: keyword; search term: “misfeasance in
public office”).
112
Karagozlu v Commissioner of Police of the Metropolis [2006] EWCA Civ 1691; R
Cruikshank Ltd v Chief Constable of Kent [2002] EWCA Civ 1840; Akenzua v Secretary of
State for the Home Department [2002] EWCA Civ 1470; Cornelius v Hackney London
Borough Council [2002] EWCA Civ 1073; L v Chief Constable of the Thames Valley Police
[2001] All ER 116; Darker v Chief Constable of the West Midlands Police [2000] All ER
1075; Ashley v Chief Constable of Sussex [2006] EWCA Civ 108. In Lord Ashcroft v
Attorney General [2002] EWHC 1122 (QB), the particulars of the claim were allowed to be
amended to include an allegation of “reckless indifference” to go to trial. In Kuddus v Chief
Constable of Leicestershire [2001] UKHL 29, which was a case on a damages issue, the
police had admitted misfeasance in public office. In O’Brien v Chief Constable of South
Wales [2005] UKHL 26, the admissibility of similar fact evidence in a claim for misfeasance
in public office was established.

74
 Conclusions
4.92 It is clear that negligence has developed in an unpredictable manner, leaving the
law so uncertain that the House of Lords has frequently been called upon to re-
address key areas of liability. Our provisional view is that both breach of statutory
duty and misfeasance in public office fail to meet the requirements of a just
system that properly balances the interests of claimants against those of public
bodies in a clear and predictable manner. In both public and private law, it
provisionally appears to us, there is a lack of any underlying principle or
foundational structure that could lead to a simpler and more predictable system.
This serves neither the interests of claimants nor those of public bodies.

SUGGESTED OPTIONS FOR REFORM

4.93 In light of these problems, we feel that there is a strong argument for the reform
of both public and private law remedies against public bodies in accordance with
the principles of modified corrective justice.

4.94 We suggest that whilst the concept of duty is appropriate when seeking to identify
situations in which individuals can be liable to one another, it is inadequate when
seeking to identify the situations where a public body should be liable.

4.95 We propose that in determining whether the state should be liable for careless
conduct, it would be more appropriate to ask whether the legal regime governing
public bodies’ actions was intended to benefit the claimant. This “conferral of
benefit” test is set out below. Furthermore, we suggest that it would be
appropriate to introduce a test of “serious fault” in relation to certain actions of
public bodies.113 Whilst public bodies confer a benefit on individuals in a wide
range of legal situations, we propose that liability should only be imposed when
administrative action falls far below that which it would be reasonable to expect.

Action in public law

4.96 We provisionally propose to allow the recovery of damages in judicial review if
the claimant satisfies the elements of conferral of benefit, “serious fault” and
causation, which are set out in detail below. In our provisional view, this is a
natural development in the law, considering that damages for breach of EU law
and under the Human Rights Act 1998 are currently available.114 Furthermore, we
do not believe that such a development would impose a substantial burden on
public bodies.

4.97 Procedurally, it would be possible to require a claimant seeking damages on a

judicial review application to plead in full the particulars of the “serious fault” at
the permission stage. The judge would then have an early opportunity to deny an
unsustainable claim for damages even if he or she allowed other judicial review
remedies to be pursued.

113
We propose that the “serious fault” regime would only apply to those actions that could
properly be termed “truly public”.
114
Research by the Commission indicates that, of the 121 successful judicial review
applications in 2007, damages would probably have been recoverable in 9 cases. In those
cases, damages would generally have run to a maximum of a few thousand pounds.

75
 4.98 Where permission is granted and a hearing is held, a finding of unlawfulness by
the court would create the potential for damages to be awarded. It would still be
for the applicant to prove that the unlawfulness found by the court was caused by
“serious fault” on the part of the defendant public body. It is important to note that
an award of damages would be an ancillary remedy in judicial review and could
only be claimed alongside the prerogative remedies. The scheme outlined in this
Consultation Paper would not alter the established grounds of judicial review.

Action in private law

4.99 Our suggested approach in private law is to place certain activities which are
regarded as “truly public” in a specialised scheme where, in order to establish
liability, the claimant would have to prove the same elements as in the public law
scheme. The effect would be to restrict liability in some areas and widen the
potential for liability in others. This reflects our attempts to strike a balance
between the following competing demands:

(1) Allowing citizens to obtain redress where they are adversely affected by
the acts or omissions of a public body in a wider range of governmental
activity than is currently the case in private law; and

(2) Appreciating that public bodies are subject to a wide range of competing
demands and are thus in a special position. This means that imposing
general negligence liability may not be in the interests of justice as it
could adversely affect the activities of the public body and therefore harm
the general public.

4.100 Cases that do not satisfy the “truly public” test would fall to be determined by the
ordinary rules of negligence.

Overview of elements in the proposed scheme

4.101 As the elements suggested for the public and private law schemes are essentially
the same, they are discussed together in this Part. The effect of this is that
liability would be no wider in private law than in public law and vice versa.
However, we are not proposing a merging of judicial review with private law
actions against public bodies. Cases would still be brought either as an
application for judicial review in the Administrative Court or as a private law action
in the civil courts. Prerogative remedies would be available only through judicial
review.

4.102 A slight difference between the two schemes comes with the nature of the court
awards in public and private law. It is intended that damages in the public law
scheme be discretionary, so as to “fit” with the nature of other orders. However, in
private law we envisage that, if the strict requirements of the scheme are fulfilled,
then damages be awarded as of right.

4.103 Our suggested scheme for dealing with such cases is set out in detail below. By
way of overview, the various elements of that scheme may be summarised as
follows:

76
 (1) Identifying “truly public” activities: The proposed ambit of the scheme
is when public bodies act in a manner which is “truly public”. In the public
law scheme, this will be satisfied by virtue of the body being amenable to
judicial review. As such, the test of “truly public” will only be applied in
private law actions. In determining what constitutes “truly public”, we
suggest a test based on whether the contested action was conducted in
the exercise of a statutory power or the prerogative. If the action is not
“truly public”, then it will be subject to the normal rules of negligence.

(2) Operation of justiciability rule: Within our new scheme, we propose a

tightening of the definition of justiciability in private law in order to
eliminate the grey area of non-justiciability that currently exists and move
away from the application of notions of Wednesbury unreasonableness in
the private law context. To this end, we suggest an interpretation of
justiciability akin to that used in judicial review.

(3) Conferral of a benefit test: We suggest replacing the duty of care

concept in private law with a test to determine whether the underlying
legislative scheme confers rights or benefits on the individual claimant.
This test would also apply in the public law context. We envisage that this
test would be interpreted broadly, in line with the jurisprudence of the
European Court of Justice, which has provided the inspiration for this
test.

(4) Serious fault: The next step in our proposed scheme is to make liability
contingent upon the claimant proving “serious fault” on the part of the
public body. The claimant would need to show that the conduct of the
public body fell far below the standard expected in the circumstances.

(5) Causation: A claimant will be required to show that the loss suffered was
caused by an action, omission or decision of the public body.

(6) Joint and Several Liability: The normal rule will be modified giving the
courts a discretion to apportion liability when this would equitable in a
given situation.

(7) General rules on damages: The normal rules on assessing

compensatory damages would apply. This would include the rules
relating to contributory negligence.

(8) Immunity: In areas where Parliament considers it necessary, there

would continue to be the opportunity to enact either a general or limited
immunity clause, which could be modelled on those already in existence,
such as the immunity of the Financial Services Authority provided by
section 102 of the Financial Services and Markets Act 2000. The
approach we adopt would endorse the legitimacy of government making
the judgement that, in a particular policy context, immunity was the
correct form of modification to the principles of corrective justice.

4.104 In provisionally proposing these options for reform, we have tried to present a
balanced package. The options should not, therefore, be considered in isolation
but rather as a system for ensuring that the small number of deserving claimants
who did not find redress through internal or external non-court mechanisms can

77
 obtain redress. Respondents may take quite a different view of the problems and
solutions, but even within our provisional proposals, there is no doubt room for
movement in relation to the individual elements of the scheme, and we would
welcome responses at that level as well.

The future of misfeasance in public office and breach of statutory duty

4.105 Included in the options for reform of private law could be the abolition of the torts
of misfeasance in public office and breach of statutory duty in most contexts.
Whilst we appreciate that in certain contexts the tort of breach of a statutory duty
should be preserved,115 the generally restrictive approach adopted by the courts
coupled with the inherent inflexibility of the tort in assessing the level of fault on
the part of the public body lead us to conclude that our proposed system would
provide a more just remedy.

4.106 Should the torts of misfeasance in public office and breach of statutory
duty be abolished?

Threshold conditions
4.107 As noted above, the requirements of justiciability and “truly public” activity are
more important in the context of a private law claim than in public law action. This
is because the proposed scheme sets the requirements for justiciability at the
public law level and the aim of the “truly public” test is to render the private law
scheme broadly similar to the public law scheme.

Justiciability
4.108 In both public and private law, the courts have recognised that some decisions of
public bodies should not be justiciable. In Part 3, we explained the operation of
the doctrine of justiciability in the context of negligence. The courts refer to the
technical limits of their institutional competence as well as to constitutional limits
based on separation of powers arguments to decline jurisdiction to consider
certain matters. We accept that there should be some cases in which the courts
should decline jurisdiction on the grounds of constitutional propriety. We would
envisage that in our suggested scheme, such a category would be a very limited
one. It would be more akin to the narrower concept of justiciability as it is
currently understood in judicial review rather than as it is currently interpreted in
negligence.

4.109 For example, matters that are inextricably bound up with the exercise of the
Monarch’s personal prerogatives should be considered non-justiciable. These
would include, for instance, a decision to grant Royal Assent to primary
legislation or to dissolve Parliament.

115
For instance, there are actions under Health and Safety legislation where it would be
desirable to retain the action. Additionally, in relation to certain private individuals, it would
be advantageous to retain the action.

78
 “Truly public” activity
4.110 It is not intended that all activities of public bodies come within the public law and
private law schemes. In fact many activities of public bodies concern mundane
operational matters which we do not think should fall within our scheme.
Examples would be the employment relationship between a Primary Care Trust
and a nurse, or a local authority placing a stationery order. These activities, it
seems to us, differ from such actions as setting a policy relating to hospital
provision in a given area or powers of stop and search by the police.
Consequently, there needs to be a filtering mechanism that isolates activities that
are unique to public bodies – which we regard as “truly public” activities - from
activities that can be undertaken by private individuals.

4.111 “Truly public” activity would be a critical test in the private law scheme since it
would determine whether the case was subject to the ordinary rules of negligence
or should be subject to a “serious fault” requirement before liability could be
imposed. In approaching this issue, the test for “truly public” has to take into
account the nature of the UK constitution and particularly the different roles
played by statute and the prerogative.

4.112 Additionally, as it is intended that the public law and private law schemes should
be broadly co-extensive, then the ambit of “truly public” should be similar to that
of amenability in judicial review.

4.113 At the outset, there would seem to be two distinct approaches to formulating a
test identifying the scope of “truly public” activity. The first is to focus on the body
itself, and examine factors such as how and for what purpose it was established.
The second is to focus on the particular actions of the public body.

4.114 Merely looking at the way in which a public body is constituted is likely to be
unsatisfactory. As noted above, there will be situations where a public body is
performing functions that are the same as those performed by private individuals.
So, a police officer driving a car in the normal course of their duties should be in
the same position as a delivery driver. Conversely, a private body exercising a
public function, such as a private company providing a prison, should be treated
as if it were a public body performing that function.

4.115 The preferable option, therefore, would appear to be to adopt an approach which
focuses on the activities of the body. This would aim to exclude actions
conducted by public bodies which are not unique to government, such as buying
paper clips or a police officer driving along the road as a normal incident of their
duties. In the latter case, the police officer should be treated as just another
driver. However the situation is different where the police officer is driving under a
“blue light”: the special nature of that activity would bring it within the ambit of a
“truly public” activity.

POWERS UNDER STATUTE

4.116 The first step to defining “truly public” is to capture those acts and omissions
governed by statute. In so doing, it is useful to consider the related concept of
amenability to judicial review, especially as the tortious and judicial review
systems should be broadly coextensive. In ex parte Datafin the court held that “if

79
 the source of the power is a statute, or subordinate legislation under a statute,
then clearly the body in question will be subject to judicial review”, 116 unless there
was a “compelling reason” to the contrary.117 This applies to public and general
acts. If the power comes from a Private Act then the body in question must be
performing a “public function”.118

4.117 The drawback of this formulation, for the purposes of identifying “truly public”
activity, is that to adopt a broad test of exercising a statutory power would capture
all of the activities of certain bodies, such as local authorities. The only way that a
local authority can act is through the use of a statutory power; therefore this
would capture both mundane operational matters and the sort of activity that we
feel should be regarded as “truly public”.

4.118 A useful insight into developing a more focused test is provided by the concept of
an “emanation of the state”119 in EU law. This is made out where private law
bodies have “special powers beyond those which result from the normal rules
between individuals”.120

4.119 The “special powers” in the EU test is similar to the phraseology adopted in New
South Wales in the wake of the Ipp Review. The legislature in the Civil Liability
Act 2002 (NSW) gave particular protection to a public body exercising a “special
statutory power”, which was defined as a power that is conferred by or under a
statute, and is of a kind that persons generally are not authorised to exercise
without specific statutory authority.121

4.120 In our view, where a body acts using what we refer to as a “special statutory
power”, that is, one that allows a public body to act in a way not open to private
individuals, then it is necessarily acting in a “truly public” fashion. This would
cover such activity as police stop and search powers under Part V of the
Terrorism Act 2000. This would apply to special statutory powers found in both of
the following contexts:

(1) where the special statutory power is one that is created explicitly in an
Act; or

(2) where a special statutory power is necessarily implied so that a public

body can discharge a statutory duty placed on it by Parliament.

4.121 This would cover “truly public” acts of a public body; it would not, of itself, cover
omissions. Traditionally, there has been a reticence to recognise liability for
omissions.122 However, this would seem to be overly restrictive where Parliament

116
R v Panel on Takeovers and Mergers ex parte Datafin [1987] QB 815 at 847.
117
Mohit v Director of Public Prosecutions for Mauritius [2006] UKPC 20, [2006] WLR 3343 at
[20].
118
R v University of Cambridge ex parte Evans (No 2) [1999] ED CR 556; R (West) v Lloyds
of London [2004] EWCA Civ 506, [2004] All ER 251.
119
Case C-188/89 Foster v British Gas [1990] ECR I-3313 at p 840.
120
Above at [20].
121
Civil Liability Act 2002 (Cth), s 43A.
122
See further the analysis of negligence in Part 3.

80
 has placed a statutory duty on a public body to act, especially when considering
that “truly public” is a threshold condition. Therefore, it is suggested that “truly
public” should cover both acts and failures to act where the body was, or should
have been, exercising a “special statutory power”. Whether an omission could
give rise to liability would then be a question of the seriousness of the fault
involved.

4.122 Whilst the concept of “special statutory powers” helps define the issue in many
cases, it does not capture all the activities that we consider to be “truly public”
when undertaken by a public body. For instance, “special statutory powers” would
not capture the building and organisation of hospitals, providing libraries or
housing the homeless. Such activities can be, and frequently are, conducted by
individuals, businesses or charities, without recourse to a special statutory power
allowing them to engage in the activity. However, in these situations, the
individual, business or charity has freely chosen to undertake the activity. This
raises a critical difference between this situation and the provision of similar
services by public bodies. That is, in many situations, Parliament places specific
statutory duties on a public body to undertake the activity; it is not a matter of
choosing to do so. For example, Part VII of the Housing Act 1996 places specific
duties on local authorities in relation to the provision of advisory schemes and
accommodation for the homeless. We suggest that a statutory duty to engage in
a particular activity that is placed on a public body should be termed a “special
statutory duty” and the activity should be considered “truly public”.

4.123 However, a final consideration is that some statutes place duties on the public at
large, or on certain sections of the public – for instance company directors. These
would not seem, on the face of it, to be “truly public”. In light of the above, it is
suggested that a further limb of any test for “truly public” activity should be action
undertaken in regard to a statutory duty placed on that public body that is not
placed on private individuals.

4.124 We would welcome comments from consultees on this formulation of “truly

public” activity in relation to statutes and suggestions on other ways that
such a test could be formulated.

PREROGATIVE POWERS
4.125 Prerogative powers are defined as “those rights and capacities which the [Crown]
enjoys alone, in contradistinction to others, and not to those which [it] enjoys in
common with any of [its] subjects”.123 This would not encompass those powers
that public bodies possess merely as a consequence of having legal
personality.124 Consequently, the situation with prerogative powers may be
simpler than in the case of statutory powers. The prerogative, as defined above,
is by its very nature something that is only utilised by the Crown and therefore it
is correct to think of it as “truly public”.

4.126 The wider powers conferred by common law, as a result of a public body having
legal personality, would not seem to be “truly public”. However, they are subject

123
Blackstone’s Commentaries 1.239. This distinction was accepted by the Court of Appeal in
R v Secretary of State for Health ex parte C [2000] 1 FLR 627.
124
See further HWR Wade and CF Forsyth, Administrative Law (9th ed 2004) pp 215 to 217.

81
 to review and a public body operating in these situations can be subject to
greater restrictions than a private individual.125

4.127 With the expansion of statute to cover much of public activity, the prerogative has
“ceased to be a significant source of administrative power against the citizen”.126
This stems from the rule that where there is a conflict between a statutory power
and the prerogative, the prerogative power is taken as having fallen into
abeyance.127

4.128 However, there are certain important areas where the prerogative is of real
relevance to the governance of the country, such as declaring war, issuing
passports and certain powers relating to the preservation of the peace.128 While
on the face of it these acts may fall within “truly public”, they are likely to be
excluded from our scheme on the basis of non-justiciability.

4.129 In the context of the diminishing role of the prerogative, it should be noted that, as
part of the Government’s Governance of Britain programme, there is increasing
pressure to codify many of the remaining instances of prerogative powers.

4.130 Consequently, we suggest that the exercise of the prerogative constitutes a “truly
public” activity. For similar reasons as put forward in relation to statutory powers,
failure to exercise a prerogative power should also be included in the test.

CONCLUSION
4.131 Having regard to all of the above, we provisionally propose the following as the
test for “truly public”:

An act or omission of the public body is to be regarded as “truly

public” if:

(a) the body exercised, or failed to exercise, a special statutory

power; or

(b) the body breached a special statutory duty; or

(c) the body exercised, or failed to exercise, a prerogative power.

A “special statutory power” is a power that allows the public body to

act in a way not open to private individuals.

A “special statutory duty” is a statutory duty placed on the public body

that is specific to it and is not placed on private individuals.

4.132 We invite comments on this formulation and whether it would act as a

suitable “gatekeeper” to the operation of the private law scheme.

125
See further R (Shrewsbury and Atcham Borough Council) v Secretary of State for
Communities and Local Development [2008] EWCA Civ 148, [2008] All ER 25.
126
HWR Wade and CF Forsyth, Administrative Law (9th ed 2004) p 216.
127
Attorney-General v De Keyser’s Royal Hotel [1920] AC 508.
128
On the latter, see R v Home Secretary ex parte Chief Constable of Northumbria Police
[1989] QB 26.

82
 Conferral of benefit
4.133 The conferral of benefit test operates to restrict the possible ambit of both judicial
review and tortious damages claims. Briefly put, it asks whether the legal regime
in which the public body acted, or omitted to act, intended to confer a benefit on
individuals and whether the harm suffered by the individual was of a similar
nature to the benefit that the regime conferred.

4.134 In seeking to outline the operation of this test, this section focuses on legal
regimes created by statute, as we believe that this is where the bulk of claims
could or would occur. Concerning the prerogative, it is felt that showing that the
prerogative power clearly conferred a benefit on individuals would be more
difficult to make out, though not necessarily impossible. Consequently, the
following discussion builds on the discussion of breach of statutory duty
considered earlier in this Part.

4.135 Currently, in the context of breach of statutory duty, the court must find a
Parliamentary intention that a breach is actionable. The problems with that
approach were considered earlier in this Part. The focus of “conferral of benefit”
is not to consider whether the statute intended to confer a right to compensation
but whether the legislative scheme objectively was intended to protect or promote
the claimant’s interests.

4.136 In many ways, the “conferral of benefit” test follows the approach of the European
Court of Justice to its “conferral of rights” test when deciding whether damages
should be awarded for a breach of EU law.129

4.137 It is important to note that we do not intend to limit the public law remedy to a
narrow class of “rights”. For example, it might be very difficult for a claimant to
show that legislation conferred a “right” to a certain licence, or that legislation
conferred a “right” not to be left homeless. It should be sufficient to show that the
legal regime was intended to advance, or protect, the interests of a class of
persons in the position of the claimant and that the action, or inaction, of the
public body adversely affected those interests.

4.138 The conferral of benefits is not so wide, however, that it would not preclude some
claims. In Three Rivers District Council v Governor of the Bank of England,130 the
House of Lords held that the First Council Banking Co-ordination Directive131 did
not confer enforceable rights of reparation on BCCI’s depositors. Three Rivers
was applied by the High Court in Poole v HM Treasury.132 In that case, the claim
was founded on Francovich principles and the claimants sought to establish that
an insurance directive granted them rights as insurers to a properly regulated
insurance market. The High Court rejected as an abuse of language the notion of
a grant of a right to be regulated and held that the purpose of the regulation was

129
Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v Federal Republic of
Germany and R v Secretary of State for Transport ex parte Factortame Ltd [1996] ECR I-
1029.
130
[2001] UKHL 16, [2003] 2 AC 1.
131
Council Directive 73/239/EEC, Official Journal L228 of 16.8.1973 p 3.
132
[2006] EWHC 2731 (Comm), [2007] All ER (Comm) 255. The Court of Appeal recently
affirmed the High Court’s decision: [2007] EWCA Civ 1021, [2007] All ER 379.

83
 not to protect the regulated but those to whom they supplied their products and
service. Thus no rights were conferred on the claimants as individuals. Three
Rivers and Poole provide examples of where claimants would not be able to
satisfy the conferral of a benefit test.

4.139 Similarly, a regulatory scheme whose objective purpose is plainly to safeguard

interests of a particular kind should not be taken as protecting of interests of a
different nature. For example, the relevant “benefit” conferred by schemes for the
inspection/certification of residential buildings, aircraft or sea vessels is limited to
the promotion of the health and safety of individuals.133 A benefit is not conferred
with respect to the protection of the claimant’s property134 or his or her economic
interests135 that are not immediately consequential upon personal injury.

4.140 Conversely, where a statute places a duty on a housing authority to provide

interim housing to a person pending a determination as to whether he or she is
actually homeless and is in priority need, then it confers a benefit on those who
the housing authority has reason to believe are homeless.136 Similarly, legislation
which provides for a compulsory licensing scheme, where the award of a licence
is automatic if the claimant fulfils certain criteria, will confer a benefit upon all
those who are entitled to a licence.137 These are examples of areas where we
would expect the “conferral of benefit” test to be made out.

4.141 Once the claimant has shown that the legislative scheme underlying the “truly
public” actions performed by the public body conferred a right on the claimant,
the next stage is to show that the right was infringed in such a serious manner as
to justify the court ordering the public body to pay compensation.

4.142 We invite commentary on the operation of the proposed “conferral of

benefit” test, in the context of the scheme set out in this Consultation
Paper.

Serious fault
4.143 This section considers the central component of the scheme outlined in this
Consultation Paper. This is the requirement that “serious fault” on the part of
public body would need to be shown before liability could be established. In
developing this test, we have been greatly influenced by the operation of the law
in relation to breaches of EU law and tests used in other jurisdictions.

4.144 The tort of negligence is essentially fault-based. The nature of the fault
requirement is a simple lack of reasonable care. It seems to us that the modified
corrective justice principle underlying our proposals requires this fault
133
Perrett v Collins [1998] 2 Lloyd’s Rep 255 (damages for personal injury suffered by aircraft
passengers are recoverable).
134
See also Marc Rich and Co v Bishop Rock Marine Co [1996] AC 211 (compensation for
loss of cargo on sunken ship is not recoverable).
135
Reeman v Department of Transport [1997] 2 Lloyd’s Rep 674 at 685 (Lord Bingham): “the
purpose of the certificate was to safeguard the physical safety of the vessel and her crew;
it was not directed in any way to the market value of the vessel”.
136
O’Rourke v Camden London Borough Council [1988] AC 188.

84
 requirement to be enhanced to require a higher level of fault when the activity
undertaken can be characterised as “truly public”. This would properly balance
the interests of claimants with the competing demands made on public bodies, a
dynamic not present in actions between private individuals.138

4.145 It is suggested that this enhanced level of fault should be characterised as

“serious fault”. Adapting the language used in other enhanced fault concepts in
the law of England and Wales, conduct would involve “serious fault” if it fell far
below the standard expected in the circumstances.

4.146 A court deciding whether the relevant conduct met the requirements of “serious
fault” would consider certain established factors, but would look for a significantly
aggravated level of fault. These factors would include:139

(1) The risk or likelihood of harm involved in the conduct of the public body;

(2) The seriousness of the harm caused;

(3) The knowledge of the public body at the time that the harm occurred that
its conduct could cause harm, and whether it knew or should have known
about vulnerable potential victims;

(4) The cost and practicability of avoiding the harm;

(5) The social utility of the activity in which the public body was engaged
when it caused the harm; this would include factors such as preventing
an undue administrative burden on the public body;

(6) The extent and duration of departures from well-established good

practice;

(7) The extent to which senior administrators had made possible or

facilitated the failure or failures in question.

4.147 Mere fault on the part of a public body is established where it is clear that the
public body, having regard to the above factors, should not have acted in the
manner that caused harm to the claimant, or should have taken appropriate steps
to prevent such harm occurring. However, “serious fault” would only be
established where the behaviour goes beyond mere administrative failure and
engages these factors in an aggravated manner. For example, where the
potential harm to the citizen was particularly grave or the departure from the
principles of good administrative practice clearly blameworthy. As such, “serious
fault” would only be established where the breach of the factors meant that the
administrative failure of the public body fell far below the standard expected of
public bodies.

137
R v Knowsley Metropolitan Borough Council ex parte Maguire (1992) 90 LGR 653. See
para 4.63 above.
138
For further analysis, see Appendix A.
139
For an analysis, see A Dugdale and M Jones, Clerk and Lindsell on Torts (19th ed 2006)
paras 8.131 to 8.144.

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4.148 Further guidance on the operation of any “serious fault” test can be provided
through reference to the “sufficiently serious breach” test already in operation in
judicial review where the claimant alleges a breach of EU law.140 Simplicity would
be served by adopting the exact terminology used by the Court of Justice in the
English language versions of its case law. However, in light of the developing
jurisprudence of the Court of Justice and adopting the factors drawn from the law
of negligence, the use of “serious fault” as the governing term seems to be more
appropriate. In fact, when considering the Court of Justice’s analysis in
Dillenkofer, ex parte Hedley Lomas, ex parte BT and Brinkman Tabakfabriken,141
it would seem that the test for “sufficiently serious” is in fact a test of fault on the
part of the Member State in question.

4.149 In Dillenkofer, a Member State’s complete failure to transpose a Directive

constituted a “sufficiently serious breach”. Again, in ex parte Hedley Lomas, as
there was no legitimate excuse for the UK’s breach of EU law – refusing export
licences to export livestock for slaughter abroad – the actions of the UK
constituted a “sufficiently serious breach”.

4.150 Conversely, in ex parte British Telecommunications, the Court of Justice

accepted that the Directive in question was capable of the meaning that the UK
had adopted. As there was no further guidance from the Community Institutions,
the Court of Justice held that the UK’s actions did not constitute a “sufficiently
serious” breach of EU law. The Court of Justice adopted a similar line of
reasoning in Brinkman Tabakfabriken, holding that whilst the Member State’s
interpretation of a tax Directive was in fact incorrect, the position adopted by the
Member State was understandable and therefore did not constitute a “sufficiently
serious” breach of EU law. This analysis would seem analogous to, or at least
complementary to, a reading of “serious fault”.

4.151 Within the “sufficiently serious” test, the “serious” criterion can be broken down
into two components. The breach should be “manifest” and “grave”. It is
sometimes said that “manifest” relates to the manner in which the rule is
breached; and “grave” to the consequences that flow from it.142 Furthermore, the
European Court of Justice has identified a number of factors which are relevant
to the characterisation of a breach as “sufficiently serious”:143

(1) the clarity and precision of the rule breached;

(2) the measure of discretion left by that rule to the national or Community
authorities;

140
See Joined Cases C-46 and 48/93 Brasserie du Pêcheur SA v Germany and R v Secretary
of State for transport ex parte Factortame (No 3) [1996] ECR I-1029.
141
Case C-178/94 Dillenkofer v Federal Republic of Germany [1996] ECR I-1281; Case C-
5/94 R v Ministry for Agriculture, Fisheries and Food ex parte Hedley Lomas (Ireland) Ltd
[1996] ECR I-2553; Case C-392/93 R v HM Treasury ex parte British Telecommunications
Ltd [1996] ECR I-1631; Case C-319/96 Brinkman Tabakfabriken v Skattenministeriat
[1998] ECR I-5255.
142
M Andenas and D Fairgrieve, “Sufficiently Serious?” in M Andenas (ed), English Public
Law and the Common Law of Europe (1998) p 320.
143
Joined Cases C-46 and 48/93 Brasserie du Pêcheur SA v Germany and R v Secretary of
State for transport ex parte Factortame (No 3) [1996] ECR I-1029 at para 56.

86
 (3) whether the infringement and the damage caused was intentional or
involuntary;

(4) whether any error of law was excusable or inexcusable;

(5) the fact that the position taken by a Community institution may have
contributed towards the omission;

(6) the adoption or retention of national measures or practices contrary to

Community law.

Role of “serious fault”

4.152 We see “serious fault” as the key to our proposals. Under the current law, the
court’s decision on whether or not to impose a duty of care is the major limiting
factor on liability. However, within our scheme, the way in which the public body
acted, or failed to act would be the deciding factor, with liability only being
imposed where the administrative behaviour of the public body fell far below that
reasonably expected of that body.

4.153 The role of “serious fault”, and the way in which our proposed reforms would “fit”
with existing legislation, can be illustrated by taking the example of a planning
application that is initially refused but is ultimately successful on appeal. There
are two main ways in which this refusal followed by approval could occur. The
first is where the initial application was refused but an appeal to the Secretary of
State under section 78 of the Town and Country Planning Act 1990 was
successful. We feel that this should not be a problem for our scheme. First, most
appeals are allowed not because the local authority took an “illegal” decision but
simply because the inspector took a different view of the planning “merits”. We
feel that it would be very hard to make out “serious fault” where the question is
one of a public body’s judgement. Second, in our general approach to the issue
of administrative redress we stress that claimants should exhaust statutory
remedies before bringing any action – this is also the case in the context of a
judicial review.

4.154 The second instance where a “called in” decision of the Secretary of State to
refuse the planning application was challenged in a successful statutory review
under section 288 of the Act. Again, the claimant would have to show “serious
fault” by the Secretary of State. As in the first instance, to amount to “serious
fault” there would have to be grave failings in the action of the Secretary of State.
These would have go far beyond mere procedural errors, of the sort which could
lead to a successful judicial review.

Assessing “serious fault”

4.155 In order to furnish examples of where the action of a public body would or would
not amount to “serious fault”, we have drawn on judgments of the Administrative
Court in 2007. We analysed all applications for judicial review where there was a
substantive hearing in a relevant matter.144 This comprised a dataset of 310

144
As such, applications to extend orders, appeals by way of cases stated in criminal matters
were excluded. The complete list of cases can be found at:
http://www.bailii.org/ew/cases/EWHC/Admin/2007/ (last visited 16 June 2008).

87
 cases.145 Of these 310 actions, the application for judicial review was successful
in 121 cases. Of these 121, 18 were found to meet the criteria so as to merit a
finding of “serious fault” on the part of the public body. The detailed analysis of
these 18 cases is contained in Appendix C.

4.156 Below we have set out two examples to illustrate how these factors may be
applied in cases where we provisionally concluded that a finding of “serious fault”
should be made. A further two cases are set out where it was felt that the
requirements of “serious fault” were not fulfilled though an application for judicial
review was successful.

SERIOUS FAULT: EXAMPLES

4.157 Aweys146 concerned the failure of a local authority to provide suitable housing
under the Housing Act 1986 to a large number of disadvantaged individuals. A
number of factors in this case suggest a finding of “serious fault”.

4.158 First, the court found that the local authority had adopted a clearly illegal policy
denying that persons housed in inadequate accommodation could be “homeless”
and therefore in priority need. Consequently, the local authority failed to fulfil its
duty under section 193 of the Housing Act 1996. The policy adopted by the
Council was so clearly at odds with the aims of section 193 that it removed the
protection that the section was designed to provide. Secondly, the magnitude of
the harm caused to the already vulnerable claimants was a significant factor. In
one case two adults and seven children of various ages had been housed in a
two-bedroom flat; in another the claimants had to remain in housing that was
clearly inappropriate for their severely disabled daughter.147 Thirdly, the
continuing nature of the failures outweighed the significant problems faced by the
defendant public body in providing suitable social housing. These reasons
evidenced administrative action that fell far below the standard expected of the
local authority and should be considered as amounting to “serious fault”.

4.159 An example of the way in which a series of cumulative failures can lead to finding
of “serious fault” is S.148 This case concerned the failure of the Secretary of State
to properly assess the claimant’s asylum application. The first failure taken into
account by the Administrative Court, in the initial application for judicial review,
was the excessive delay in dealing with S’s claim; this amounted to some four
and a half years. Secondly, the Secretary of State had informed the claimant that
he could apply for entry clearance on return to Afghanistan. However, the British
Embassy in Afghanistan had no facilities for this, making such an application
impossible. Finally, the Secretary of State had unlawfully certified that the
claimant had no right to appeal the refusal of discretionary leave to remain.

4.160 Concerning the first of these factors, the delay had been the result of the
Government’s prioritising certain claims in order to reduce a backlog of
outstanding claims. The court held that had the claim been based solely on delay
145
The analysis of all 310 cases will be available in table form at: http://www.lawcom.gov.uk/.
146
Aweys v Birmingham City Council [2007] EWHC 52 (Admin), [2007] All ER 230.
147
This is considered in greater detail in Appendix C.
148
R (S) v Secretary of State for the Home Department [2007] EWHC 51 (Admin), [2007] All
ER 218.

88
 then it would have failed. However, the cumulative nature of the failures led the
Court to find the action illegal. Informing the claimant of the possibility of entry
clearance in Afghanistan was clearly wrong and, had the claimant relied on this
advice, could have had led to a potentially catastrophic result. In relation to the
unlawful certification, this effectively removed a vital statutory remedy designed
specifically for the protection of those in the claimant’s position.

4.161 The seriousness of these failures, coupled with the effect that these failures
would have on the claimant, took the claim far beyond mere administrative failure
and led to our assessment of “serious fault”.

NOT “SERIOUS FAULT”: EXAMPLES

4.162 “Serious fault” is intended to constitute a level of failure where the administrative
action is at such a level that the payment of monetary compensation would be
justified under the principles of “modified corrective justice”. To highlight that
“serious fault” is intended to go far beyond illegality or negligence, it is useful to
consider the following examples, where we did not consider that the requirements
of “serious fault” had been fulfilled.

4.163 Barlas concerned a family seeking to reunite itself in the UK.149 Here the
Administrative Court held that the appropriate Immigration Rules had been
misapplied and that additional conditions had been imposed that could cause
undue hardship for families. Additionally the importance of the issue to claimants
and their families was an important consideration. Consequently, the
Administrative Court quashed the decision not to assess the claim for exceptional
leave to remain. Whilst the decision was unlawful, and concerned a matter of
importance to the individuals involved, the public body’s conduct did not involve
the sort of cumulative failure that would lead to a finding of “serious fault” in cases
such as Aweys.150 Barlas is an example of the sort administrative failure that can
occur in any sort of large organisation.

4.164 Camden Lock151 concerned a failure to establish in the Camden London Borough
Council’s Unitary Development Plan (“UDP”) that the land on which the applicant
conducted its business was for “market use”. When London Underground sought
to redevelop its tube station, it also applied for permission to develop a mixed-use
site above ground. This would have led to the destruction of the claimant’s
market business. The claimant sought to resist this and a planning inspector
found that the proposed development would have a significant detrimental effect
on the area. This was upheld by the Secretary of State. A subsequent inquiry
suggested that the land be designated for “market use”, but the local authority
failed to incorporate this into its UDP. This was a serious issue for the applicant
and the Administrative Court duly quashed the UDP. However, this is another
example of basic administrative failure, and, whilst this may have amounted to
negligence on the part of those tasked with drawing up the UDP, it lacks the sort
of factors that move administrative failure into the realm of “serious fault”.

149
R (Barlas) v Consul General, British Consulate, Amsterdam [2007] EWHC 1709 (Admin),
[2007] All ER 359.
150
Considered above.
151
Camden Lock (London Ltd) v Camden London Borough Council [2007] EWHC 495
(Admin), [2007] All ER 298.

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 INTERIM CONCLUSIONS ON “SERIOUS FAULT”
4.165 We conclude that there would be little difficulty in creating settled and secure
jurisprudence regarding the “serious fault” requirement for the purposes of
determining the private and public law liability of public bodies.

4.166 We suggest that the combination of the conferral of benefit test and the
requirement for “serious fault” will provide a more suitable control mechanism for
actions against public bodies than the traditional concept of establishing a duty of
care. This would also provide more certainty as to when liability would be
imposed than under the current law of negligence. This would be of benefit both
to claimant citizens and defendant public bodies. Further consideration of the
possible effects of our suggested options is contained in Part 6.

4.167 We invite comments on the possible operation of a “serious fault” regime

in the context of the scheme outlined in the Consultation Paper.

Causation
4.168 With regard to causation, we consider that general tort principles can be applied
in the context of our suggested scheme. Therefore, the claimant must be able to
establish that:

(1) the defendant’s conduct did in fact result in the damage complained of;
and

(2) the damage is not in law too remote a consequence of the defendant’s
wrongdoing.152

4.169 These principles are very well established and the courts are accustomed to their
application. As we suggest that they will apply unmodified in the “truly public”
context in the private law scheme, we do not consider that it is necessary to
elaborate on them any further.

4.170 However, there are some issues relating to judicial review that are worth
considering. These relate to awarding damages where a decision has been
quashed and remitted back to the original decision-maker.

The role of causation in judicial review

4.171 Causation has an important role to play in limiting the recovery of damages in
judicial review, particularly in cases concerning procedural impropriety. An
example is where a disciplinary body has suspended an individual from working
and has done this in a manner that led to a successful judicial review claim on the
basis of procedural impropriety. If the decision is quashed and then remitted back
to the original decision-maker, loss could only be established if the decision-
maker subsequently holds that the individual should not be suspended. If the
decision-maker holds that the individual should still be suspended – this time in a
procedurally correct way – the claimant has effectively suffered no loss.

152
A Dugdale and M Jones (eds), Clerk and Lindsell on Torts (19th ed 2006) para 2.01.

90
4.172 By way of examples, the effect of this would be:

(1) Causation: A claimant holds an existing licence and the public body
removes it in a procedurally improper way. If, after judicial review, the
public body approaches the decision in a procedurally proper way and
decides in the claimant’s favour, there should be damages payable for
losses sustained between the invalid and valid decision.

(2) No causation: A claimant holds an existing licence and the public body
removes it in a procedurally improper way. If, after judicial review, the
public body takes the same decision but this time in a procedurally valid
way, damages are not payable for losses sustained between the invalid
and valid decision.

(3) No causation: A claimant applies for a licence for the first time. The
public body makes the decision not to grant the licence in a procedurally
improper way. If, after judicial review, the public body takes the same
decision but this time in a procedurally valid way, damages would not be
payable as there is no loss between the invalid and valid decision.

4.173 Is this approach to causation satisfactory?

When are damages recoverable?

4.174 It is suggested that in the public law scheme damages should be discretionary,
as is the case with other remedies in judicial review. In private law the normal
rules of damages would apply, such that damages are available as of right once
the other elements have been satisfied.

4.175 Should the discretionary nature of judicial review remedies be preserved

for damages in the public law context?

Types of damages recoverable

4.176 Under the ordinary rules of negligence, when a claimant has shown a breach of
duty and established causation, damages will follow. The purpose of awarding
damages is to attempt to restore claimants to the position they would have been
in had the breach of duty not taken place. Under our suggested scheme, we
provisionally propose that damages should follow the same rules that govern
ordinary negligence. However, there is one area which causes some difficulty,
namely the rules governing the recovery of damages for pure economic loss.

Pure economic loss

4.177 As we discuss above, there is a general “exclusionary rule” that militates against
recovery for pure economic loss in all but a few specified circumstances. Earlier
in this Part, we consider the reasons why recovery for pure economic loss has
generally been excluded and ask whether the traditional reasons for restricting
liability are equally valid in relation to public bodies as they are in the purely
private context.

4.178 We are keen to invite discussion on the possibility of recovery for pure economic
loss within our proposed regimes outside the exceptional circumstances in which
it is currently allowed. We do this on the basis of the principles of “modified

91
 corrective justice”, which we endorse throughout this Consultation Paper. While
we do not consider that our principle of modified corrective justice is capable of
directly generating detailed rules of liability, on the face of it, it is difficult to see
why there should be a distinction between the type of loss suffered.

4.179 We acknowledge that this is a difficult issue. However, the paradigm case of
administrative illegality is the unlawful refusal of a licence causing financial loss. If
there were no liability for financial loss as a result of seriously substandard
administrative action, we feel that this would dramatically reduce the
effectiveness of any reform and fail to meet the requirements of a principled
system for administrative redress.

4.180 We stress that we invite discussion on pure economic loss in the context of the
specific safeguards contained in our proposals, including:

(1) the proposed “conferral of benefit” test;

(2) the requirement to prove “serious fault”;

(3) causation;

(4) modifying the general rule on joint and several liability; and

(5) general principles for apportioning tortious damages such as mitigation

through contributory negligence.

4.181 In our provisional view, these safeguards are sufficient to provide a proper
balance between the competing demands on public bodies. That is, they balance
the obligation to provide redress for individuals harmed by substandard
administrative action while limiting the liability of public bodies in a just manner, in
view of the wider obligations they owe to society as the distributors of services
funded through public taxation.

4.182 In our view, there are two characteristics of the “conferral of benefit” test which
are likely to operate so as to limit the recovery for pure economic loss. First, the
conferral of benefit test would be designed to act as a bar to applications by
those whose protection was not envisaged by the statutory regime.

4.183 Secondly, the “conferral of benefit test” would only provide for recovery where the
type of loss is one that the statutory regime had been designed to protect.
Therefore a statutory regime created for the protection of lives and vessels at sea
could not be interpreted as protecting a purely economic loss, even if it could be
proved that the public body’s actions caused this loss or were a significant
contributory factor.153

4.184 In the consideration of “serious fault” we have already outlined how the operation
of this safeguard sets a much higher threshold than that which exists for simple
illegality in public law, and that which currently exists for the tort of negligence.

153
Consequently, the decision in Reeman v Department of Transport [1997] 2 Lloyd’s Reports
648, would survive.

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4.185 The proposed modifications to joint and several liability discussed below would
mark a fundamental change in the nature of public body liability. In modifying the
current law, we envisage that the impetus behind much of the previous litigation
would be removed. In many earlier cases, such as Murphy v Brentwood District
Council154 or Reeman,155 the public body was effectively the “last man standing”
and therefore the whole of the claim was directed towards it. By being able to
appropriately apportion a claim so as to take into account the public body’s true
involvement in any losses, the potential liability of any public body would be
greatly reduced.

4.186 It is arguable that this approach to pure economic loss could be adopted in both
the public and private law schemes.

4.187 We appreciate that in private law this would mean a significant change in the
current position. At present the approach in negligence is for the law to develop in
an incremental fashion. A duty of care will be found where the requirements set
out in Caparo v Dickman156 are met, such that it is “fair, just and reasonable” to
impose liability, or where there is a situation analogous to the “assumption of
responsibility” in Hedley Byrne v Heller.157 However we still provisionally, believe
that the application of the modified corrective justice principle suggests that there
should be recovery for pure economic loss in the private law scheme, as in the
proposed public law scheme.

4.188 A further consideration in deciding whether to apply the same approach in both
schemes would be that creating a difference between the two schemes of this
nature would require claimants seeking recompense for pure economic loss to
bring their claims in the already over-burdened Administrative Court.

4.189 On this basis, we would welcome comments on the recovery of pure

economic loss:

(1) In the public law scheme;

(2) In the private law scheme.

Joint and several liability

4.190 Earlier in this Part we note that the principle of joint and several liability can
operate harshly in the state liability context. Our provisional view is that there is a
strong case for mitigating the blanket rule on joint and several liability in the state
liability context.158 We provisionally suggest that for cases falling within our
154
Murphy v Brentwood District Council [1991] 1 AC 398.
155
Reeman v Department of Transport [1997] 2 Lloyd’s Reports 648.
156
Caparo Industries v Dickman [1990] 2 AC 605.
157
Hedley Byrne and Co Ltd v Heller and Partners Ltd [1964] AC 465.
158
Under our provisional proposals, the principle of joint and several liability would continue to
apply to private defendants. It is beyond the scope of this project to make a more wide-
ranging assessment of the operation of the principle of joint and several liability. Where a
public body bears some responsibility for the claimant’s loss but the claimant brings
proceedings exclusively against the private defendant, the latter will be liable for the entire
loss. It will, however, be open to the private defendant to join the authority as a party, or
subsequently claim contribution.

93
 proposed scheme, the courts should be able to abandon the principle of joint and
several liability and instead determine liability proportionately, based on the
extent of the public body’s responsibility for the loss.159

4.191 In France, the principle of joint and several liability applies in private law but has
been abandoned by the administrative courts in favour of proportionate liability.160
This was in part because it was thought that the administration should not be
seen as a kind of insurance for claimants.161 This has had a significant impact in
cases concerning regulatory and supervisory failure. In Kechichian,162 for
example, the state regulator was found to be negligent in its supervision of a
bank but was held liable for only 10% of the claimants’ total loss, the primary
cause of loss being the fraudulent activities of the directors.163

4.192 In the USA, there has been particular concern about the operation of the joint and
several liability rule in relation to local authorities. It has been noted that:

Local governments have cited [joint and several liability] as a reason

for increasing taxes and eliminating public facilities and services.
Because of their deep pockets, public entities, particularly
municipalities, are often brought into suits for their passive roles in
“causing accidents”.164

4.193 Accordingly, municipalities have been exempted from joint and several liability in
Michigan,165 while in Hawaii the rule was abolished in respect of all government
entities.166 There has also been widespread reconsideration of the rule in US tort

159
In the context of contribution proceedings, “responsibility” has been taken to refer both to
the degree of the defendant’s fault, and the extent to which it contributed to the damage.
Downs v Chappell [1997] 1 WLR 426 at 445: “It is just and equitable to take into account
both the seriousness of the respective parties' faults and their causative relevance. A more
serious fault having less causative impact on the plaintiff's damage may represent an
equivalent responsibility to a less serious fault which had a greater causative impact”.
160
There are a few exceptions, notably, where more than one public body contributes to the
same indivisible damage, they will be held jointly and severally liable.
161
Deguerge in Dalloz Droit Administratif, Fasicule 830, para 83.
162
CE 30 November 2001, Kechichian, AJDA 2002.136.
163
While French administrative courts have been willing to examine claims against financial
regulators (albeit that liability is generally subject to the gross fault standard), such claims
are unlikely to succeed in English law: see Yuen Kun Yeu v Attorney General of Hong
Kong [1988] AC 175; Davis v Radcliffe [1990] 1 WLR 821 and Remedies Against Public
Bodies (October 2006) Law Commission Scoping Report,
http://www.lawcom.gov.uk/docs/remedies_scoping_report.pdf, para 3.15. This reluctance
to impose liability on financial regulators may stem, at least in part, from the fact that it
would involve holding them liable for the whole loss. The amounts at stake can be
substantial. For example, the claim against the Bank of England in the BCCI litigation was
for £850 million.
164
L Pressler and K Schieffer, “Joint and Several Liability: A Case for Reform” (1988) 64
Denver University Law Review 651, 654 (footnote omitted).
165
Michigan Compiled Laws, ss 600.6304(4) and 600.6312.
166
This has now been extended to all defendants. Hawaii Revised Statutes, s 663-10.9.

94
 law generally – thirty-seven states have enacted some kind of legislative reform,
experimenting with a broad range of techniques.167

4.194 The experience in foreign jurisdictions, especially US states, highlights that there
are intermediate positions between proportionate liability and a strict application
of the joint and several liability rule and therefore the question of reform need not
entail a stark choice between the two. The following are possible options for
mitigating the rule on joint and several liability in the “truly public” sphere:

(1) A strict rule of full proportionate liability. Apportionment would follow

automatically in cases that satisfy the “truly public” test.

(2) Imposing a minimum threshold for a concurrent wrongdoer’s comparative

fault. The public body respondent would benefit from proportionate
liability only if its comparative fault fell below a certain percentage, for
example 51 or 60%.168

(3) Giving the courts discretion to abandon the joint and several liability rule
in “truly public” cases.

4.195 Our provisional preference is for option 3, that is, a discretion allowing courts to
apportion liability in cases that satisfy the “truly public” test. We accept that there
may be cases in which apportioning liability may not be appropriate or necessary.
It may be unnecessary for example, where all wrongdoers are solvent and/or
before the court, enabling the court to apportion liability. It may be inappropriate
where the public body is the primary wrongdoer. If a public body respondent is
found 80% liable, it is unfair for the claimant, rather than the respondent, to bear
the burden of a concurrent wrongdoer’s insolvency or impecuniosity. A strict rule
of proportionate liability would not, in our view, give the courts sufficient flexibility
to achieve the right balance in individual cases.

4.196 Do consultees agree that the courts should have discretion to abandon the
joint and several liability rule in “truly public” cases, or do consultees
prefer another technique for mitigating the rule? What factors do
consultees think should guide the courts in exercising their discretion?

167
See the website of the National Association of Mutual Insurance Companies:
http://namic.org/reports/tortReform/JointAndSeveralLiability.asp (last visited 16 June
2008).
168
This mechanism is used by a number of states in the USA, with varying percentage
thresholds: 15% in Minnesota, 51% in Iowa, Montana and South Dakota and 60% in New
Jersey. See the table on the website of the National Association of Mutual Insurance
Companies: http://www.namic.org/PrintPage.asp?ArticleID=6446 (last visited 16 June
2008).

95
 MOVEMENT BETWEEN PUBLIC LAW AND PRIVATE LAW
4.197 While the discussion in the next Part is concerned with movement of cases
between the courts and ombudsmen, it is also important to consider the
movement of cases within the court system, and specifically, between the public
and private law systems.

The nature of the claim

4.198 The current law draws a distinction between claims that a public body has taken
an illegal decision and claims that a public body has acted without due care. A
claimant who alleges that an administrative decision is unlawful must almost
invariably use the procedure for judicial review whilst claims of carelessness
would found an action in negligence.

4.199 A basic premise of our scheme is that there is a real difference in nature (at least,
in the vast majority of cases) between public law illegality, on the one hand, and
negligence, on the other. We believe that it will be readily discernible whether the
claim should proceed under the public law or private law scheme. A key
advantage of our approach is that, by more closely approximating the remedies
available in public and private law, it removes the incentive on a claimant to
“forum shop”. In particular, it would no longer be necessary for a claimant who
sought compensation to re-shape an allegation of illegality to fit a negligence
mould because of the lack of compensation on judicial review.

4.200 It is illustrative to take an example adapted from the facts of Smith (by her mother
and next friend) v Secretary of State for Health.169 A child develops a serious
long-term disorder after having been given a safe dose of aspirin by her parents.
An expert committee of the Department of Health, at a time before the incident,
knew that there was a connection between aspirin and the disorder in children.
There was overwhelming evidence of the dangers. However, such a warning was
not issued immediately after the evidence was made known. This is because the
Secretary of State did not consider that there was sufficient evidence. However,
after vigorous lobbying from the medical profession, the warning was
subsequently issued. Nonetheless, it came too late for the child in question.

4.201 The parents wish to take legal action against the Secretary of State. In this
situation, the current law would encourage them to attempt to proceed in
negligence. The principal potential remedies available to them in public law, such
as a quashing or a mandatory order, would no longer be relevant, because the
warning had subsequently been given. The principal remedy they seek is
compensation for the harm done to the child, not available on judicial review.
However, in reality, what the claimants are doing is challenging the
reasonableness, ultimately, the legality, of the Secretary of State’s decision-
making. But the current distribution of available remedies forces the claimants to
try to dress up an allegation of illegality as an allegation of negligence.

4.202 Let us assume an alternative scenario but based on the same facts. The
Secretary of State accepts the evidence of the expert committee, and plans to
issue a warning immediately. However, instead of being issued within a couple of
weeks, the warning is not issued for two months, as a result of administrative
169
[2002] EWHC 200 (QB), [2002] Lloyd’s Reports Med 333.

96
 delay. Amongst other breakdowns in communication, the minutes and associated
papers of a previous meeting of the committee responsible for the
implementation of the warning were lost, and the committee had to be
reconvened and re-take evidence from external experts.

4.203 Here, the policy decision to issue a warning was itself lawful. Judicial review, the
core function of which is to control the legality of decision-making, would not be
appropriate here. The purpose of the legal action that the parents might take
against the Department of Health would be to challenge the careless way in
which the policy decision was implemented. In this respect, the parents’ claim is
naturally one in negligence.

4.204 We acknowledge that there are some cases where the same sequence of facts
displays aspects of illegality and of negligence. In these circumstances, parallel
proceedings would be acceptable. Where the claimant can plausibly argue, for
example, both that a policy is unlawful, and that it was carelessly implemented, it
might be right to allow both sets of proceedings to continue. The court has a wide
variety of case management powers under the Civil Procedure Rules to deal with
concurrent claims or claims brought using the wrong procedure. For example, the
court can stay a negligence action pending a ruling on legality.170 The court also
has the power to transfer where a claim has been brought inadvertently using the
wrong procedure171 and the power to deal with claims deliberately commenced
using the wrong procedure.172

4.205 Through case law, the courts have developed practical guidance on which
procedure to use, when to transfer claims and when proceedings in a particular
forum constitute an abuse of process.173 This guidance would continue to be of
practical assistance under our proposed schemes.174

Limitation periods
4.206 At present, an application for judicial review must be made promptly and in any
event not later than three months after the grounds for the claim first arose.175
Time may be extended, if good reasons exist. For actions in tort, the general rule
is that actions must be brought within six years,176 or three years if the claim
involves personal injury.177 We are not proposing any changes to these limitation
periods. It is suggested that the action in public law would be subject to the same

170
Civil Procedure Rules, r 3.1.
171
Civil Procedure Rules, r 30.5 and r 54.20.
172
Currently, a claim which should have been brought by way of judicial review can be
dismissed as an abuse of process, if the intention was to flout the strict limitation period:
Civil Procedure Rules, r 3.4.
173
M Fordham, Judicial Review Handbook (4th ed 2004), pp 562 to 574.
174
See, for example, Trustees of the Dennis Rye Pension Fund v Sheffield City Council
[1998] 1 WLR 840; Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988.
175
Civil Procedure Rules, r 54.5(1).
176
Limitation Act 1980, s 2. Note that an overriding time limit of fifteen years applies to claims
in negligence which do not involve personal injury: s 14B.
177
Above, s 11.

97
 limitation period as other judicial review cases and that the action in private law
be subject to a similar limitation period as similar tort actions.

CLOSING COMMENTS
4.207 In summary, the current law relating to the liability of public bodies is uncertain
and over complicated. In some places it is too restrictive to claimants and in other
areas, public bodies are faced with an ever-increasing burden on public
resources.

4.208 In exploring the issues raised by our analysis of the current position, the aim of
this Consultation Paper is not to change government policy promoting the use of
internal complaints procedures or non-court mechanisms such as ombudsmen.
Indeed, our approach underlines its importance. However, we recognise that,
whatever forms of alternative dispute resolution that there may be, in some
circumstances aggrieved parties will still go to court. When they do so, the
system they encounter should be capable of delivering justice for claimants, while
properly recognising the public benefit of the activities of public bodies.

4.209 The possible effects of these options for reform are considered in further detail in
Part 6.

98
 PART 5
RELATIONSHIP BETWEEN OMBUDSMEN AND
COURT BASED OPTIONS

INTRODUCTION
5.1 This Consultation Paper is concerned with providing fair and reasonable redress
to claimants for substandard administrative action. This involves two main areas
of reform. The first, as discussed in Part 4, is to reform the public and private law
avenues of redress to create a system that both enhances the certainty of the law
and recognises the special position of public bodies. The second is to strengthen
and clarify the relationship between two of the central pillars of administrative
redress – the courts and ombudsmen.

5.2 This Part focuses on this second area and considers the ways in which the
relationship between the ombudsmen and the courts can be made more
transparent and flexible. Both public bodies and claimants should have a clear
understanding of which complaints should be brought before ombudsmen and
which should be brought before the courts. This should be coupled with a suitable
mechanism to facilitate movement between the courts and ombudsmen. Finally,
we make suggestions to improve access to the ombudsmen.

5.3 In general, our suggestions apply equally to the Parliamentary Ombudsman, the
Local Government Ombudsman and the Public Services Ombudsman for Wales.
An exception concerns the suggestions relating to the MP Filter which affect only
the Parliamentary Ombudsman.

FACTORS GOVERNING THE RELATIONSHIP BETWEEN COURTS AND

OMBUDSMEN
5.4 In this section, we consider the overlapping jurisdiction of the courts and
ombudsmen.

Overlapping jurisdictions of the courts and ombudsmen

5.5 The jurisdiction of the ombudsmen concerns the investigation of
maladministration. As it can often be difficult to draw a line between
maladministration and unlawful administrative action, or between
maladministration and negligent administrative action, there is a strong potential
for overlap between the jurisdictions of the courts and ombudsmen. As such,
there may be situations in which an individual starts proceedings in an
inappropriate forum. A forum may be “inappropriate” for a number of reasons, for
example:

(1) The claimant starts proceedings in the courts but the essence of the case
is one of maladministration rather than illegality, or vice versa.

(2) The claimant discovers that he or she cannot obtain the relief or remedy
they want in the forum initially chosen.

99
 (3) The claimant starts court proceedings but it becomes apparent that
because of the value of the claim it would be more appropriately dealt
with by an ombudsman.1

(4) There are other practical benefits to pursuing a claim in the alternative
forum.

5.6 It is consistent with the proper administration of justice that claims that are not
started in the appropriate forum can be easily transferred. As the current
Parliamentary Ombudsman has suggested:

The most important thing is that we should have a system of

administrative justice that enables any individual dispute in the sphere
to get to the place – ombudsman, court, tribunal – where it has the
best chance of being resolved as quickly, and cost effectively, as
possible.2

5.7 In addressing the need to create a more responsive regime, reference is made to
factors that might be considered when deciding whether a case should be
investigated by an ombudsman or heard in a court.

Factors to be taken into account in determining the appropriate means of

redress
5.8 Our consideration of these principles has been informed in part by the principles
used by the ombudsmen in this jurisdiction to determine the types of cases they
consider are suitable for investigation. We have also considered the Australian
system, in which the Administrative Appeals Tribunal and the Commonwealth
Ombudsman operate a system of cross-referrals.

5.9 The factors outlined below are neither exhaustive nor mutually exclusive.

Factor 1: The availability of statutory procedures

5.10 Where a specialist statutory procedure exists for a particular grievance, cases
should normally be pursued through this procedure.3 There is a risk that
claimants may otherwise resort to an ombudsman for purely tactical reasons
rather than to pursue a genuine complaint.4

5.11 However, the existence of a statutory appeals procedure does not in all cases
preclude an investigation by an ombudsman. For example, the Child Support Act

1
For example, see Anufrijeva v Southwark LBC [2003] EWCA Civ 1406, [2004] QB 1124.
2
Parliamentary and Health Service Ombudsman, The Ombudsman, the Constitution and
Public Services: A Crisis or an Opportunity? (December 2006),
http://www.ombudsman.org.uk/about_us/FOI/whats_available/documents/speeches/ombu
dsman_constitution_publicservices.html (last visited 16 June 2008).
3
The benefits of using the statutory route over the ombudsman are discussed in R Kirkham,
“Challenging the Authority of the Ombudsman: The Parliamentary Ombudsman’s Special
Report on Wartime Detainees” (2006) 69 Modern Law Review 792.
4
For example, we are aware that there is a concern that claimants will use the possibility of
recourse to the ombudsman to halt deportation proceedings in the asylum and immigration
context. Given the volume of deportation proceedings this would have serious implications
for the administrative justice system.

100
 1991 establishes a statutory scheme to give claimants a right of appeal to a
tribunal in respect of assessments made by the Child Support Agency. However,
where an individual wishes to complain about the conduct of the Agency itself,
they may have recourse to an ombudsman. This would be where the complaint
concerns issues of maladministration rather than a challenge to the assessment
result.5

5.12 Similarly in the community care context, while complainants will normally be
expected to have completed the statutory social services complaints procedure,
the Local Government Ombudsman has indicated that:

In fact we are not bound by any restriction here, and we will

investigate a complaint before a statutory process has been
exhausted. We do so especially where there has been a breakdown
of trust between the complainant and the authority, or where both
sides agree that there is no point in completing a process which is
unlikely to satisfy the complainant.6

Factor 2: The nature of the complaint

5.13 The nature of the complaint can determine whether the court or an ombudsman
is the more appropriate forum. For example, where a finding of maladministration
hinges on a contested legal issue, the case should go before a court or tribunal.

5.14 In contrast, where a case concerns systemic failings, the ombudsmen may be the
most appropriate method of redress. The Parliamentary Ombudsman “can issue
a special report to highlight systemic shortcomings, identify remedies and
propose longer-term change”.7

Factor 3: Characteristics of the parties

5.15 The complainant’s ability to initiate, prepare and conduct their own case may be
relevant. For example, the Local Government Ombudsman considers the ability
of the claimant to cope with the adversarial nature of court proceedings when
deciding whether the court or an ombudsman is the more appropriate forum.
Factors that may point to the vulnerability of claimants include their age, state of
health and level of education.

5.16 Similarly, where claimants do not know the full facts and could not obtain them
through court proceedings, the ombudsmen may be the more appropriate method
for obtaining redress. As the Local Government Ombudsman notes, in court “the
onus is on the parties to obtain evidence and to decide which information to

5
Rowley v Secretary of State of Work and Pensions [2007] EWCA Civ 598, [2007] 1 WLR
2861 at [79]. It was noted that the White Paper preceding the 1991 Act had expressly
made provision for the ombudsman to investigate complaints of maladministration: “it must,
therefore, have been within the contemplation of Parliament when the 1991 Act was
enacted that complaints about maladministration of the CSA could be referred to the
Ombudsman”.
6
J White, “Community Care and the Local Government Ombudsman for England” [2006]
Community Care Law Reports 8.
7
Cited in Parliamentary and Health Service Ombudsman, The Parliamentary Ombudsman:
Withstanding the Test of Time, 4th report (2006-07) HC 421, p 2.

101
 present” whereas “ombudsmen themselves go out to find the information and
have more scope than court to ferret out the facts”.8

5.17 The complainant’s financial situation may also be relevant. The ombudsmen
procedure does not require complainants to have legal representation and is free
for both parties. Parties to a legal action will normally require representation and
the unsuccessful party may be ordered to pay the costs of the other side.

5.18 If the complainant is in an ongoing relationship with the defendant then the less
adversarial and more conciliatory forum of the ombudsmen may be more
appropriate than the courts. As Lord Woolf stated, in support of the Independent
Housing Ombudsman Scheme:

In many situations an ombudsman scheme is more likely to produce

satisfactory results because the relationship between a tenant and his
or her landlord is a continuing one and relations between tenants and
their landlords need to be as good as possible. Litigation in the courts
is adversarial and therefore almost inevitably damaging to that
relationship.9

Factor 4: The claimant’s objectives

5.19 The remedy or outcome sought by the claimant will influence whether the courts
or an ombudsman is the more appropriate forum.

5.20 Where claimants want an explanation or an apology, the ombudsmen may be

more appropriate.10 Ombudsmen reports provide claimants with an explanation of
how and why things have gone wrong, although information prejudicial to the
safety of the state or against the public interest is not disclosed.

5.21 The ombudsmen may also be more appropriate if claimants do not want their
grievances made public. Ombudsmen investigations are conducted in private and
parties may make a complaint without disclosing their identities.11 By contrast,
hearings in judicial review proceedings are generally in public,12 as are hearings
in private law matters.

5.22 Where the claimant is seeking a monetary remedy, the value of the remedy
sought will influence the choice of forum. As the cost of court proceedings should
not be disproportionate to the remedy, then the size of the award compared to

8
See E Osmotherly, “The Local Government Ombudsman as an Alternative to Judicial
Review” (2000), http://www.lgo.org.uk/judicial_review.htm (last visited 16 June 2008).
9
Taken from a letter to the Housing Ombudsman at the inception of the Housing
Ombudsman Scheme on 1 April 1997.
10
Where ombudsmen make a finding of maladministration, their investigations often
conclude with the person or public body asking the ombudsman to convey their apologies
to the complainant.
11
M Biles, “Alternative Therapy” (2003) 7 Landlord and Tenant Review 25 at p 27.
12
The court may in certain circumstances order that a hearing be held in private: Civil
Procedure Rules, r 39.2 and Contempt of Court Act 1981, s 11.

102
 the cost of legal fees can be a key factor.13 Additionally, whilst tort law adopts a
comprehensive approach to damages, restoring claimants to their pre-injury
position by awarding damages for both past and prospective losses, the
ombudsmen do not necessarily follow the same approach and awards can be
smaller. This can be more appropriate in some circumstances, when taking into
account the interests of both of the parties.

5.23 Another relevant factor is the type of loss the claimant is seeking to recover. If the
claimant has suffered a loss not recognised by law, such as distress, hardship or
pure economic loss, they will currently not be able to recover this through the
courts. However, they may be able to do so through the ombudsmen.14

5.24 Where the claimant is seeking a prerogative remedy, then judicial review is, of
course, the appropriate option. Similarly, where urgent interim relief is required,
judicial review will be appropriate, as ombudsmen cannot provide interim relief.

MOVEMENT BETWEEN OMBUDSMEN AND THE COURTS

5.25 This Consultation Paper affirms the vital role played by ombudsmen in providing
redress for claimants and in improving administrative practices as a whole. It is
our view that ombudsmen should be understood as providing a “system of
justice” in their own right.

5.26 In order to strengthen the role of ombudsmen and improve the efficiency of
administrative justice more generally, we make three suggestions for reform:

(1) Make the transfer of cases from the courts to ombudsmen clearer and
easier by providing the courts with a power to stay proceedings
specifically for the purpose of referring a matter to an ombudsman.

(2) Clarify and strengthen the respective roles of the courts and ombudsmen
by providing ombudsmen with a power to refer matters of law to the
courts for adjudication.

(3) Modify the statutory bar to facilitate the suggested power to stay
proceedings and to clarify the ambit of the ombudsmen’s jurisdiction.

Power to stay proceedings

5.27 As illustrated in the examples above, proceedings may be brought in the courts
that would be better dealt with by an ombudsman investigation. Currently, the
courts have a broad power to stay proceedings for the purposes of allowing the
parties to consider alternative dispute resolution procedures.

13
Anufrijeva v Southwark London Borough Council [2003] EWCA Civ 1406, [2004] QB 1124.
See also the Local Government Ombudsman’s guidance: E Osmotherly, “The Local
Government Ombudsman as an Alternative to Judicial Review” (2000),
http://www.lgo.org.uk/judicial_review.htm (last visited 16 June 2008); Local Government
Ombudsman, “Can the Ombudsman Investigate this Complaint?”
http://www.lgo.org.uk/advisers-guide/advisers-guide.htm (last visited 16 June 2008).
14
R v Commissioner for Local Administration ex parte Liverpool City Council [2001] 1 All ER
462 at [28].

103
5.28 The Civil Procedure Rules make specific provision for the court to stay
proceedings for the purposes of ADR for one month, or for such a period as it
considers appropriate.15 This may be at the request of the parties or at the court’s
own initiative where it considers that such a stay would be appropriate.16
Although “ADR” is defined broadly in the Civil Procedure Rules (CPR), in practice
it tends to be used synonymously with mediation.17

5.29 In judicial review, if the Administrative Court considers that there is an alternative
remedy which ought to exhausted, this may be considered a good reason to
refuse permission or to refuse relief if the issue arises at the substantive
hearing.18 The court also has a general case management power to stay
proceedings in appropriate circumstances.

5.30 However, these powers cannot always be used effectively because of the
statutory bars on the ombudsmen’s jurisdiction, which limit the power to
investigate where court proceedings have already been commenced.
Consequently, we suggest below that the statutory bar be modified to facilitate
the stay process and the referral of cases to ombudsmen.

Suggested options for reform

5.31 Our provisional view is that courts should have a specific power to stay
proceedings where they think that a case, or a specific issue within a case, would
be better dealt with by an ombudsman’s investigation. The claimant would be at
liberty to revive proceedings before the court if there remained any point of law
that required adjudication.

5.32 This power would be valuable in a number of circumstances. For example, the
court might conclude that the dominant feature of the claim was an allegation of
maladministration, even if it also contained arguable elements of illegality.
Alternatively, the court might conclude that a claim of illegality was arguable to
justify permission to apply for judicial review, but as a practical reality was
unlikely to succeed at hearing and the claimant’s only realistic prospect of relief
or remedy was with an ombudsman. Another example would be where the court
believes that the case would benefit from the kind of thorough independent
investigation which ombudsmen provide.

5.33 Our suggestion would build on the existing power in the CPR in relation to civil
claims. Our suggestion gives both the civil courts and the Administrative Court an
express power to stay proceedings for the purposes of investigation by an
ombudsman.

5.34 The new stay we are proposing would require claimants to exhaust their
complaint to an ombudsman before a claim could be continued before a court. An

15
The court can extend the stay until such date, or for such a specified period as it thinks
appropriate. Civil Procedure Rules, r 26.4(3).
16
Civil Procedure Rules, r 26.4(2).
17
M Supperstone, D Stiltz and C Sheldon, “ADR and Public Law” [2006] Public Law 299 to
300.
18
M Fordham, Judicial Review Handbook (4th ed, 2004) para 36.3. See also K Olley,
“Alternative Remedies and the Permission Stage” [2000] Judicial Review 240.

104
 alternative would be to rely on combining the existing stay to consider ADR with
cost sanctions where a complainant resisted making a complaint to an
ombudsman.19 However, this may not be very effective as a large proportion of
claimants are publicly funded.

5.35 We believe that the level of compulsion the stay entails is appropriate and does
not breach the requirement of access to the court implicit in Article 6 of the
European Convention on Human Rights. The proposal would be a restriction on
the right of access, imposing a pre-condition on it, rather than ousting it
completely. It is clear from the jurisprudence of the European Court that the right
of access to the court is not absolute and can be restricted in pursuit of a
legitimate objective.20

5.36 We do however recognise that the level of compulsion could mean that in some
circumstances an ombudsman would be investigating a complaint where the
complainant was initially unwilling to utilise or engage with the process. However
we do not think that this would necessarily undermine the investigation. Unlike
mediation, the ombudsmen’s methodology does not require a positive and
ongoing commitment from the complainant. We would nevertheless be interested
in views as to whether, contrary to our suggestion, an investigation would be
inhibited in these circumstances.

5.37 In some instances the court might be reluctant to exercise a power to stay if there
was some urgency to the claim and it was thought that the application for judicial
review might be heard more expeditiously than a complaint to an ombudsman.
This difficulty might be overcome if the ombudsman were prepared to adopt “fast
track” procedures to handle complaints which the court had remitted and had
indicated as deserving expeditious treatment.21

5.38 Do consultees think a stay provision would be a useful tool in ensuring

disputes are dealt with in the appropriate forum? What problems do
consultees see with the operation of the stay as described?

Referral on a point of law

5.39 Ombudsmen do not have jurisdiction to adjudicate on points of law – this remains
the exclusive remit of courts and tribunals. In practice this means the
ombudsman will decline to investigate a complaint if it concerns an unresolved or
disputed point of law. The complainant will then be required to initiate and pursue
legal proceedings even if there are broader issues of maladministration at stake.
19
Under the CPR, where a party has unreasonably refused an offer of ADR the court has the
discretion to impose a costs sanction (Civil Procedure Rules, r 44.3) For a costs sanction
to apply, it will be for unsuccessful litigants to prove that their opponent’s refusal to have
recourse to ADR was “unreasonable” in all the circumstances. See Halsey v Milton Keynes
General NHS Trust [2004] EWCA Civ 576, [2004] 4 All ER 920. The rules could be
expanded to make specific reference to costs penalties for refusal to have the case
transferred to the ombudsman.
20
See Golder v United Kingdom (1975) 1 EHRR 524; Ashingdane v United Kingdom (1985)
EHRR 528 and the recent reiteration of the principle by the House of Lords in Seal v Chief
Constable of South Wales [2007] UKHL 21, [2007] 1 WLR 1910.
21
This could be a discretionary power which would not be used if, for example, it appeared to
the court or the ombudsman that the claimant had started the action in the courts solely in
order to take advantage of this fast track procedure.

105
5.40 This restriction on the ombudsmen’s jurisdiction has been relatively
uncontroversial. The public sector ombudsmen have generally not been receptive
to suggestions that their jurisdiction should be expanded to allow them to
determine points of law. There is concern that it could lead to adversarial
practices and damage the flexibility of ombudsmen’s working practices.22 The
Local Government Ombudsman has noted that “one strength of ombudsman
schemes is that they are able to look beyond legality and examine the detail of
administrative practices”.23

5.41 However, there is considerable support for the ombudsmen to have a power to
make referrals to the court for a determination of a point of law. The Local
Government Ombudsman, responding to the Law Commission’s Housing
Disputes paper, considered that it might be “helpful [in] complaints involving a
difficult and important point of law for us to have the power to apply to a court for
a determination of the point”.24 Similarly, in his response to our Housing Disputes
paper, the Public Services Ombudsman for Wales also found this “appealing”.25
Lord Woolf has been a consistent advocate for this type of reform. The interim
report on Access to Justice argued that:

Ombudsmen are not expected to determine an important issue of

legal principle but to leave complaints involving such issues to the
courts. I would like to see the ombudsmen having a discretion to refer
complainants to the courts except that, where a point of law is
concerned, the ombudsman should be able to apply to the court for a
ruling without requiring the complainant to start court proceedings.26

5.42 A recent report on the Parliamentary Ombudsman also suggested that

“proceedings could possibly be speeded up were the ombudsmen able to refer
the issue of law to courts”.27

Suggested options for reform

5.43 We provisionally agree that the ombudsmen ought to have the discretion to refer
points of law to the court for determination. A determination, once made, would
be sent back to the ombudsman to apply to the complaint at hand. This would
retain the separate constitutional function of the court as the interpreter of the law
while increasing flexibility in the system.

22
See the Law Commission publication, Housing: Proportionate Dispute Resolution, An
Issues Paper, Analysis of Responses, para 3.32,
http://www.lawcom.gov.uk/docs/disputes_responses_analysis.pdf.
23
The Local Government Ombudsman in response to the Law Commission publication,
Housing: Proportionate Dispute Resolution, An Issues Paper (2006),
www.lawcom.gov.uk/docs/issues_paper.pdf.
24
Above.
25
The Public Services Ombudsman for Wales in response to the Law Commission
publication, Housing: Proportionate Dispute Resolution, An Issues Paper (2006),
www.lawcom.gov.uk/docs/issues_paper.pdf.
26
Lord Woolf, Access to Justice: Interim Report (1995) ch 18, para 18.
27
Parliamentary and Health Service Ombudsman, The Parliamentary Ombudsman:
Withstanding the Test of Time, 4th Report (2006-07) HC 421.

106
5.44 We envisage the reference procedure only being invoked in exceptional
circumstances. The Local Government Ombudsman, in his response to our
Housing Disputes paper, noted:

From our experience, we would not estimate that we would use such
a facility, if it was available, in more than a small number of cases that
are essentially about maladministration but which cannot be
progressed satisfactorily without prior resolution of a substantive legal
issue.28

5.45 We think this is broadly the correct approach. In the vast majority of cases a
finding of maladministration will not be dependent upon the determination of a
contentious legal point, even where it arises in connection with the complaint.29
We would, however, welcome views on this issue.

5.46 With this in mind we suggest that the following factors might be relevant when
deciding whether to refer a legal question to the court:

(1) The ombudsman must consider that the determination of the particular
legal question is necessary for it to make a finding of maladministration.30

(2) A legal question should only be referred if it is contentious or unresolved.

If it has already been determined or is pending determination by the
courts, a reference will be unnecessary.31

(3) A reference should not be made where it is more appropriate for the
whole dispute to be dealt with by a court. The reference procedure
should be invoked only where the complaint is essentially about
maladministration but cannot be progressed without prior resolution of a
legal issue.32

5.47 Do consultees think that the ombudsmen should have the power to make
references to the court of points of law?

5.48 If it is accepted that ombudsmen can make a reference, then there is the further
question as to whether such a reference should bypass the permission (or
equivalent) stage of legal proceedings.

28
The Local Government Ombudsman in response to the Law Commission publication,
Housing: Proportionate Dispute Resolution, An Issues Paper (2006),
www.lawcom.gov.uk/docs/issues_paper.pdf. See the Analysis of Responses, para 3.32,
http://www.lawcom.gov.uk/docs/disputes_responses_analysis.pdf.
29
See for example R v Local Commissioner for Administration, ex parte Liverpool City
Council [2001] 1 All ER 462.
30
For example, contrast R v Local Commissioner for Administration ex parte Liverpool City
Council [2001] 1 All ER 462 and R v North and East Devon Health Authority ex parte
Coughlan [2002] QB 213.
31
If it is pending resolution, it might be appropriate for the ombudsman to halt the
investigation until the outcome is known.
32
The Local Government Ombudsman in response to the Law Commission publication,
Housing: Proportionate Dispute Resolution, An Issues Paper (2006),
www.lawcom.gov.uk/docs/issues_paper.pdf. See the Analysis of Responses, para 3.32,
http://www.lawcom.gov.uk/docs/disputes_responses_analysis.pdf.

107
5.49 We can see arguments on both sides. To allow the ombudsmen to bypass the
permission stage could be seen as promoting comity between the ombudsmen
and the courts, as distinct systems for obtaining redress.

5.50 On a practical level, if there were to be a requirement for permission, the situation
may develop where permission is seemingly granted automatically when a
reference is made from an ombudsman. If such a practice did develop, then the
requirement for permission would simply add delay to a claim without serving any
purpose.

5.51 Removing the permission stage would create a situation similar to that in place
when applications are made for a forced marriage protection order, under section
63C of the Family Law Act 1996.33 This draws a distinction between certain
applicants with official status, who do not need leave, and members of the
general public, who do need leave.

5.52 On the other hand, such a proposal would significantly alter the current position
on permission. There is no such provision for any class of applicant in judicial
review now. It could also be argued that retaining a permission requirement
would allow the already heavily burdened Administrative Court to retain control
over its own caseload.

5.53 Do consultees think that references from the ombudsmen should bypass
the permission stage before proceeding to the Administrative Court?

ACCESS TO THE OMBUDSMAN

5.54 In Part 3 we note two rules that currently restrict access to ombudsmen: the
statutory bar and the MP filter. In the sections that follow we flesh out some of the
concerns with these rules and suggest a number of options for reform.

The statutory bar

5.55 In general, ombudsmen possess a wide discretion in determining whether to
conduct an investigation. However one important limit on their discretion is that
they cannot conduct an investigation where the complainant has or had recourse
to a legal remedy before a court or tribunal. This is known as the “statutory bar”.

5.56 The relevant provision in the Parliamentary Commissioner Act 1967 states:

Except as hereinafter provided, the Commissioner shall not conduct

an investigation under this Act in respect of any of the following
matters, that is to say—

(a) any action in respect of which the person aggrieved has or

had a right of appeal, reference or review to or before a
tribunal constituted by or under any enactment or by virtue of
Her Majesty’s prerogative;

(b) any action in respect of which the person aggrieved has or

had a remedy by way of proceedings in any court of law:

33
As inserted by the Forced Marriage (Civil Protection) Act 2007, s 1.

108
 Provided that the Commissioner may conduct an investigation
notwithstanding that the person aggrieved has or had such a right or
remedy if satisfied that in the particular circumstances it is not
reasonable to expect him to resort or have resorted to it.34

5.57 This provision reflects the intention of the scheme, which was “established to deal
with grievances where no remedy was available in court” in order to address
gaps in the system of administrative justice that existed at the time.35 The bar
was intended to prevent the ombudsman from trespassing on the jurisdiction of
the courts and tribunals.

5.58 However, the “gaps” in the system have narrowed with the development of
administrative law; as a result many complaints of maladministration are now also
amenable to legal action. This has made the operation of the statutory bar more
difficult and contentious. In the sections that follow we consider how the bar is
interpreted, and the problems which can arise.

5.59 A distinction is drawn in practice between those cases in which complainants

have a potential remedy but have not yet availed themselves of it, and cases
where complainants have already had recourse to a remedy before a court or
tribunal.

Where the complainant has a potential legal remedy

5.60 Where the complainant has a potential legal remedy but has not yet taken steps
to pursue it, ombudsmen cannot investigate the complaint unless they are
satisfied that it was not reasonable to expect the complainant to resort or to have
resorted to the remedy.36 In practice, this provision gives ombudsmen
considerable discretion about whether to investigate.37

5.61 Ombudsmen do not usually exercise their discretion in favour of the complainant
where a specific statutory appeal mechanism exists for dealing with a complaint.
In these circumstances the complainant will normally be expected to follow the
statutory route established by Parliament.38

5.62 The issue will often be less clear cut where the alternative remedy is a legal
action in court. Here the ombudsmen have tended to exercise their discretion in a
pragmatic manner, paying particular regard to the practical benefits for individuals
in having their complaint dealt with via the ombudsmen. For example, the Local
Government Ombudsman has suggested a number of areas where a dispute
may be better dealt with by an ombudsman investigation than via judicial review,
34
Parliamentary Commissioner Act 1967, s 5(2). See also Local Government Act 1974,
s 26(6).
35
M Senevirante, Ombudsmen: Public Services and Administrative Justice (2002) p 55. See
also pp 31 to 34.
36
The Parliamentary Commissioner Act 1967, s 5(2).
37
The exercise of this discretion is subject to judicial review: R v Local Commissioner for
Administration for the North East Area of England ex parte Bradford City Council [1979]
QB 287 and R v Parliamentary Commissioner for Administration ex parte Dyer [1994] All
ER 375. In practice, courts will not readily interfere with the exercise of the ombudsman’s
discretion.
38
However see para 5.11 above.

109
 drawing on similar factors to those we have set out above.39 The
court/ombudsmen boundary nevertheless remains blurred and is liable to give
rise to confusion.40

Where a complainant has had recourse to a legal remedy

5.63 If the complainant has already had recourse to a legal remedy, it is problematic
arguing that it was not reasonable to have resorted to it. On a strict reading of the
statutory bar the ombudsman could not then investigate a complaint based on the
same facts. This particular aspect of the bar has proven particularly problematic,
with different interpretations developing as to its scope.

5.64 The first interpretation, adopted by the Local Government Ombudsman, is that
the mere commencement of legal proceedings by the complainant is sufficient to
oust the ombudsman’s jurisdiction.41 This can put the claimant in a difficult
position. For example, a claimant applying for judicial review may be denied
permission on the basis that the ombudsman would be the more appropriate
forum for the complaint.42 Yet the fact that they have instituted proceedings will
preclude the claimant from making their complaint to the ombudsman. In this way
the present system relies on the claimant pursuing redress in the appropriate
forum first time round.43 Therefore, claimants who institute proceedings simply to
protect their position or claim interim relief are prevented from subsequently
pursuing a complaint before the ombudsman even if well-founded. Additionally,
on this reading of the provision, the restriction would apply to claimants who are
forced to withdraw from court proceedings because they have been unable to
obtain funding.

5.65 The Local Government Ombudsman has acknowledged that this restriction can
produce undesirable outcomes. In its response to our Housing Disputes Paper,
the Ombudsman identified the bar as a rule that inhibited proportionate and
appropriate dispute resolution, arguing that it has created “rigidity in the system”,
and expressed support for some relaxation of the restriction in the founding
legislation.44

5.66 The second interpretation, now adopted by the Public Services Ombudsman of
Wales, is that the bar operates to oust the ombudsman’s jurisdiction only where,
having instituted legal proceedings, the complainant actually obtains a remedy. It
39
See E Osmotherly CB, “The Local Government Ombudsman as an Alternative to Judicial
Review” (2000), http://www.lgo.org.uk/judicial_review.htm (last visited 16 June 2008).
40
This is something that came through strongly in the responses to our Housing Disputes
Paper, Housing: Proportionate Dispute Resolution, An Issues Paper (2006),
www.lawcom.gov.uk/docs/issues_paper.pdf.
41
Until recently, the Parliamentary Ombudsman also adopted this interpretation of the bar.
See for example A v Secretary of State for the Home Department [2004] EWHC 1585
(Admin), [2004] All ER 91 at [11].
42
Civil Procedure Rules, r 1.4(e). See also Anufrieva v Southwark London Borough Council
[2003] EWCA Civ 1406, [2004] QB 1124 at 1162.
43
See the Judicial Review Pre-Action Protocol, para 3.2. See also R (Umo) v Commissioner
for Local Administration in England [2003] EWHC 3202 (Admin), [2004] ELR 265 at [17].
44
The Local Government Ombudsman in response to the Law Commission publication
Housing: Proportionate Dispute Resolution, An Issues Paper (2006), available at
www.lawcom.gov.uk/docs/issues_paper.pdf.

110
 follows that the ombudsman has discretion to investigate where no remedy has
been obtained. This approach allows claimants who have been unsuccessful in
establishing a cause of action to have recourse to the ombudsmen.45 This can be
perceived as giving claimants “two bites at the cherry”, which we recognise may
be considered unacceptable by public bodies. However in these circumstances,
the ombudsman is free to exercise their discretion to refuse to investigate a
complaint.

5.67 It can be argued that these two approaches are too simplistic, as there may be
cases where the legal remedy does not redress the whole injustice suffered by
the complainant, yet they are prevented from pursuing full redress through the
ombudsman. The Parliamentary Ombudsman has interpreted its discretion
broadly to address this type of situation, finding discretion to investigate cases
where the complainant has suffered injustice that was not, and could not be,
remedied by a court or tribunal. Therefore a claimant who successfully obtains an
order in judicial review to quash an illegal decision but receives no compensation
for past losses can seek monetary redress from the ombudsman.

Suggested options for reform

5.68 The statutory bar is increasingly seen as problematic. Two consecutive
amendments to the Tribunal, Courts and Enforcement Bill were laid seeking to
repeal section 5(2) of the Parliamentary Commissioner Act 1967 (and equivalent
provisions) and lift the bar completely. The amendments had the backing of the
ombudsmen, the head of the Administrative Court and the Senior President of the
Tribunals service, amongst others, but were eventually withdrawn for lack of
Government support. While the Government accepted that there was a case for
reform,46 Vera Baird, speaking on behalf of the Government, explained that there
were “complex issues” that needed to be resolved prior to reform:

They arise particularly in judicial review cases; they need to be dealt

with quickly, for the sake of both complainants and public authorities,
so that they know what they need to do to continue administration.
Judicial review has tight time limits, so we have to get the balance
right between those who have a genuine grievance and those who
are looking for a reason to prevent the legitimate outcome of the
decision from being put into effect.47

5.69 We recognise these and other concerns that have been expressed about the
removal of the bar in its entirety. However, for the reasons we outline above, we
provisionally consider that the bar as it currently stands is unsatisfactory and
unclear and requires reform. The bar also requires modification to facilitate the
stay process and referral of cases to the ombudsman that is suggested above.

5.70 Consequently, our preliminary view is that the statutory bar, as expressed in
section 5(2) of the Parliamentary Commissioner Act 1967 and equivalent

45
Reeman v Department of Transport [1997] 2 Lloyd’s Rep 648 is a case in point.
46
See for example the comments of Baroness Ashton in Hansard (HL) 31 January 2007, Vol
689, col 304.
47
Hansard (HC) 27 March 2007, Tribunal, Courts and Enforcement Bill Committee, 7th
sitting, col 246.

111
 provisions, should be repealed and replaced with provisions which will serve to
redefine the jurisdiction of the ombudsmen.

5.71 In particular, the current default rule that an ombudsman should not investigate a
complaint where the aggrieved has or had a legal remedy should be changed.
We suggest that the bar should be reformulated along the following lines: an
ombudsman may conduct an investigation, notwithstanding that the person
aggrieved has or had a legal remedy, if in all the circumstances it is in the
interests of justice to investigate. In exercising this discretion, an ombudsmen
ought to have regard to the factors set out above.48

5.72 This would reformulate the ombudsmen’s discretion where an available legal
remedy had not been pursued. Encouraging the ombudsmen to investigate cases
that may otherwise go to the courts is consistent with the Government’s
emphasis on using alternative dispute resolution processes. Structuring
ombudsmen’s discretion and specifying a list of factors to which ombudsmen
should have regard should lead to greater certainty and enhance transparency.

5.73 This modification would also allow ombudsmen to investigate a complaint where
the claimant has had recourse to a legal remedy, including where the court had
adjudicated upon matters relating to the complaint.

5.74 We acknowledge that this raises a difficult issue and may be subject to a wide
range of views. On the one hand, the broader remit of the ombudsmen can
provide a means to obtain redress for a least some of those who find that they
have no remedy in judicial review or tort. On the other hand, we recognise that
repeated consideration of the same issues in different legal contexts can result in
duplication of effort and resources and cause delay. Furthermore, inconsistent
results may seem perplexing to claimants and undesirable from the point of view
of public bodies who invest public resources in defending litigation. After
consideration, however, we have provisionally come to the conclusion that the
requirement that the investigation must, in all the circumstances, be in the
interests of justice strikes an appropriate balance between these positions.

5.75 Do consultees agree that the statutory bar should be modified both in
cases where legal proceedings have been commenced and where there is a
potential remedy before the court? Do consultees agree that this should be
done so that the default position is that ombudsmen have discretion to
investigate regardless of the availability of a legal remedy?

48
See paras 5.8 to 5.24 above.

112
 The MP filter
5.76 As noted in Part 3, the Parliamentary Ombudsman cannot accept a complaint
directly from a member of the public. All complaints must be channelled through a
Member of Parliament.49 The Public Services Ombudsman of Wales and the
Local Government Ombudsman do not have an equivalent filter.

5.77 The MP filter was introduced in response to concerns raised about the office
when it was established in 1967: first, that it would undermine the role of MPs
acting on behalf of and looking after their constituents, thereby undermining the
role of Parliament; second, that the new office would be overwhelmed by
complaints. The office was consequently conceived of as an adjunct to
Parliament, “rather than the citizens’ defender”50 with the filter introduced to
preserve MPs’ constitutional role.51 In addition it was intended to be a mechanism
by which only suitable complaints would be passed on to the ombudsman, that is,
cases in which there was a strong prima facie case and over which the
ombudsman had jurisdiction. The filter was “seen as experimental”52 and it was
recommended that consideration should be given to a right of direct access after
a period of five years.53 The review never materialised.

5.78 The filter has since attracted much criticism.54 It has been considered an
unnecessary barrier to access, particularly for certain groups such as ethnic
minorities, younger people and those from deprived backgrounds who might find
it more difficult and demanding to approach their MP.55 Moreover, many see the
filter’s underlying rationale as no longer applicable. The Collcutt review argued
that the principle that MPs should represent constituents in seeking redress was
no longer applicable in light of the modernisation of government and the new,
more diverse methods by which citizens can obtain redress from public bodies.56

5.79 In contrast, other commentators take the view that MPs still have an important
role to play in channelling complaints to the ombudsman.57 It has been suggested
that the filter keeps MPs in touch with the problems and concerns of their

49
The MP is kept involved throughout the process: he or she will be kept up-to-date on the
progress of the complaint and is informed of any decisions made.
50
Parliamentary and Health Service Ombudsman, The Parliamentary Ombudsman:
Withstanding the Test of Time, 4th report Session (2006-07) HC 421, p 5.
51
P Colcutt and M Hourihan, Review of the Public Sector Ombudsmen in England (2000)
Cabinet Office Report.
52
G Drewry and C Harlow, “A ‘Cutting Edge’? The Parliamentary Commissioner and MPs”
(1990) 62 Modern Law Review 745.
53
Justice, The Citizen and the Administration: the Redress of Grievances (1961) p 75.
54
It was recently referred to as “one of the most criticised aspects of the 1967 Act”:
Parliamentary and Health Service Ombudsman, The Parliamentary Ombudsman:
Withstanding the Test of Time, 4th report (2006-07) HC 421.
55
Hansard (HL) 4 February 2005, vol 669, col 486.
56
P Colcutt and M Hourihan, Review of the Public Sector Ombudsmen in England (2000)
Cabinet Office Report, para 3.43.
57
See, for example, the Government’s response to the Parliamentary Commissioner
(Amendment) Bill 2005, discussed below: Hansard (HL) 4 February 2005, col 669, cols
493 to 495.

113
 constituents and in turn this “informs MPs’ contributions to larger debates…on
legislation and otherwise”.58

5.80 The MP filter has, it has been claimed, been “proved remarkably successful”59 at
preventing an onslaught of complaints to the ombudsman. But if this is true, it is
not clear whether this means that the filter is an effective method of screening out
unmeritorious claims, or an arbitrary bar to access to the ombudsman. Indeed,
there is now concern that the Parliamentary Ombudsman is underused and that
this is at least partly attributable to the lack of direct access. The experience of
the Local Government Ombudsman and other ombudsmen suggest a strong
correlation between the provision of direct access and increased recourse to
ombudsmen. There was a 44% increase in complaints to the Local Government
Ombudsman in the year following the removal of the “councillor filter”.60

5.81 There has been a concern that the Parliamentary Ombudsman would not be able
to cope with the increased workload that direct access would bring, although the
Ombudsman has indicated recently that that would not be the case.61 It is true
that the Local Government Ombudsman faced some difficulty in determining
complaints speedily in the period following removal of the filter but it has since
adjusted.62 In addition, direct access to the Health Commissioner has been long
established and complaints are dealt with relatively easily and speedily.63

5.82 The removal of the filter has considerable support. Direct access has been
recommended by Justice, the Collcutt Review and the Public Administration
Select Committee, amongst others.64 The Parliamentary Ombudsman herself and
the majority of Parliamentarians support abolition of the filter.65 Others have
advocated dual access. This was the approach taken in a recent Private
Members Bill, which created a right of direct access but retained the option of
making a complaint through an MP.66 It was an attempt to improve access, while

58
Hansard (HL) 4 February 2005, vol 669, col 484.
59
M Seneviratne, Ombudsmen, Public Services and Administrative Justice (2002) p 121.
60
That is, from 4, 914 complaints in 1987-88 to 7,055 complaints in 1988-89. The rate of
increase subsequently slowed down: 25% in the second year (1989-90) and 5% in the third
year (1990-91).
61
Second report of Public Administration Select Committee, Tax Credits: putting things right
(2005-06) HC 577, Ann Abraham, Oral Evidence Q 6. Referred to in Parliamentary and
Health Service Ombudsman, The Parliamentary Ombudsman: Withstanding the Test of
Time, 4th report (2006-07) HC 421.
62
F Laws, “The Local Government Ombudsman: Contemporary Issues and Challenges”, in N
Hawke (ed), The Ombudsman – Twenty Five Years On (1993) p 64.
63
Hansard (HL) 4 February 2005, vol 669, col 486.
64
Respectively, Justice, Our Fettered Ombudsman (1977); Justice, Administrative Justice:
Some Necessary Reforms (1988); P Collcutt and M Hourihan, Review of the Public Sector
Ombudsmen in England (2000) Cabinet Office Report; Public Administration Select
Committee, Annual Report of Parliamentary Ombudsman, Fourth Report (1999-2000) HC
106.
65
In a survey conducted by the Public Administration Select Committee in 2004, of the MPs
who responded, 66% were in favour of removing the filter:
http://www.ombudsman.org.uk/about_us/FOI/whats_available/documents/surveys/mp_surv
ey_04.html (last visited 16 June 2008)
66
The Parliamentary Commissioner (Amendment) Bill 2005.

114
 assuaging the concerns of those who wished to see the filter retained.67 The Bill
passed successfully through the Lords but was not taken up in the Commons.68
The Government nevertheless recognised that it was an important issue.

Suggested options for reform

5.83 Given the concerns that the MP filter is limiting access to the Parliamentary
Ombudsman – and in light of our view that the role of the ombudsmen should be
strengthened – our preliminary view is that there is a strong case for abolition of
the MP filter. There are four reasons in support of this view.

5.84 First, it no longer appears necessary to use the filter to control the flow of
complaints to the ombudsman. The ombudsman is not obliged to accept every
complaint received but has a broad discretion whether or not to investigate. The
ombudsman is free to exercise this discretion to refuse those complaints that are
vexatious, misconceived or more appropriately dealt with by other means. In our
view, this “internal filter mechanism” is sufficient to exclude unsuitable cases. We
feel it likely that the MP filter significantly reduces the volume of complaints not
because MPs have exercised their judgment that the complaints should not be
passed on to the ombudsman but rather because complainants fail to make the
initial approach to an MP. If this is right, it is likely to be an inaccurate way of
weeding out weak cases. The point has also been made that the need for the
ombudsman to be protected by a filter mechanism has reduced over time:

The wider complaints system that now exists is more developed than
the one in place when the 1967 Act was first introduced and the
Parliamentary Ombudsman normally expects complaints to be put
before second-tier complaint handlers before she considers them.69

5.85 Secondly, removing the MP filter will help facilitate the movement of cases
between the courts and ombudsmen. Under our suggested options, a court would
be unlikely to order a stay of proceedings to refer a matter to the ombudsman
unless it considered the case was suitable for investigation by the ombudsman.
The MP filter, as an additional mechanism to weed out unsuitable cases, would,
in our provisional view, be superfluous and likely to create delay.

5.86 Thirdly, the argument that the filter allows MPs to keep in touch with constituents’
concerns can be addressed adequately by a notification requirement. Once the
ombudsman has accepted jurisdiction, the constituent MP or any nominated MP
could be notified of the complaint and given the option of having continued
involvement with the progress of the claim. Furthermore, there may be merit in
allowing a complainant to have the option of making a complaint through an MP
in addition to direct access – the “dual access” approach recently put forward in

67
Hansard (HL) 4 February 2005, vol 669, col 479.
68
The provisions were reintroduced in the Constitutional Reform (Prerogative Powers and
Civil Service etc.) Bill in 2006. Again it passed through all the stages in the House of Lords.
69
Parliamentary and Health Service Ombudsman, The Parliamentary Ombudsman:
Withstanding the Test of Time, 4th Report (2006-07) HC 421.

115
 the Parliamentary Commissioner (Amendment) Bill and operated by the
European Ombudsman.70

5.87 Finally, the abolition of the filter would bring the Parliamentary Ombudsman in
line with other public sector ombudsmen in the UK and ombudsmen in most other
parliamentary democracies. Their experience shows that the institution is able to
operate effectively without the filter.71

5.88 We invite the views of consultees on our provisional proposal to abolish

the MP filter. Do consultees consider that the filter should be abolished
outright, or that there should be a “dual system” which would allow
complainants the option of making a complaint through an MP or of
seeking direct access to the Parliamentary Ombudsman?

70
Complainants have the option of referring complaints directly to the ombudsman or via an
MEP.
71
See discussion in Hansard (HL) 4 February 2005, vol 669, col 497.

116
 PART 6
EFFECT ON PUBLIC BODIES

INTRODUCTION
6.1 As we saw in Part 4, the effect of changes in the underlying legal regime has led
to an expansion over time in the liability of public bodies and consequent
pressure on limited resources. This Part builds on that analysis by examining the
effect of the suggested private and public law schemes on public bodies.

6.2 In approaching this, we have been guided by two salient factors. First, we have
been guided by the necessity, within our understanding of “modified corrective
justice”, to provide a settled liability regime that meets the needs of aggrieved
citizens who have been subject to substandard administrative action while also
recognising the special nature of public bodies and their resources. Secondly, we
wish to avoid the catastrophic effects of a continual expansion of liability, as seen
in certain US states during the 1970s and 1980s, and more recently, in the
Australian insurance crisis of the late 1990s and early 2000s. We give detailed
consideration to the latter situation and the position adopted by the
Commonwealth and States of Australia following the Ipp Review of the Law of
Negligence in this Part.

OVERVIEW: GAINS AND LOSSES

6.3 The package suggested in Part 4 would create certain benefits for public bodies
and claimants alike. Some benefits are “win-win” – they are good for both
claimants and public bodies. Reforming an area of law to make it clearer and
more principled has a public benefit in itself. Within the suggested scheme there
are also clear and identifiable benefits for claimants and public bodies.

6.4 In terms of substantive liability, if considered at any point in time, some aspects of
our package of provisional proposals deliver benefits to public bodies (and
corresponding losses to actual or potential claimants), and vice versa. On the
benefit side for public bodies, certain areas of existing liability would be taken out
of normal negligence and made subject to the higher threshold requirement of
“serious fault”.

6.5 Examples of areas which would be moved from the ordinary negligence regime to
the “serious fault” regime would be “tripping”1 and certain highway authority
cases. Also in this category would be actions against emergency services where
they are driving with a “blue light”. In each case, there is of course a
corresponding cost to claimants. On the other hand, there are also areas where
there are possible benefits for claimants and corresponding losses for public
bodies, such as the provision of certain policing or social services activities (albeit
subject to the “serious fault” requirement).

1
“Tripping” cases refers to those cases that arise where a local authority has breached its
duty to reasonably maintain a pavement or where public bodies carrying out public works
have failed to properly protect the individual citizens. See: Haley v London Electricity Board
[1965] AC 778.

117
6.6 The immediate or short-term effect of our proposed scheme would be a gain for
claimants in some areas and a gain for public bodies in others. However, the
long-term effects would be a general benefit for public bodies as normal
negligence would be prevented from expanding into the areas covered by the
proposed scheme. Essentially this would protect public bodies from any massive
expansion in liability were the House of Lords to revisit and overturn cases such
as Hill2 or Murphy.3

6.7 As we showed in Part 4, these cases are already under pressure in light of the
line of reasoning that flows from the European Court of Human Rights’ judgment
in Osman.4 In particular, the restrictive policy approach in Hill has recently been
doubted in the Court of Appeal,5 and is currently under appeal to the House of
Lords. If the scheme suggested in Part 4 were adopted, areas covered by cases
such as these, for example policing, would be removed from potential common
law liability and placed within the “serious fault” regime. From the point of view of
the Government, taking no action may be a high-risk strategy. It is always
possible (and, given sufficient time, highly likely) that the House of Lords, or the
new Supreme Court, will remove these common law restrictions on liability and
continue the historic widening of the tort of negligence. This would lead to much
greater potential liability in these new areas, based as it would be on the lower
threshold of breach in ordinary negligence.

2
Hill v Chief Constable of West Yorkshire [1989] AC 53.
3
Murphy v Brentwood District Council [1991] 1 AC 388.
4
Osman v United Kingdom (2000) 29 EHRR 245.
5
Smith v Chief Constable of Sussex Police [2008] EWCA Civ 39, [2008] All ER 48 at [45]
(Rimer LJ).

118
 6.8 The way in which these options for reform would change the landscape of liability
is expressed in the diagram below. The effect is to take certain matters out of the
general negligence scheme and place them within the “serious fault” regime.

Diagram 1: The effect of the Law Commission’s options for reform

Area of public body
activity

Increased
justiciability and
wider conferral
of benefit in LC
options

Current liability in tort

Threshold
condition of
“truly
public”
Liability in negligence, Degree of Competence
Serious fault, harder to
normal tests relating to
prove than breach in
standard of care and
“normal” negligence.
breach.

Benefits

Existing liability that remains.

Costs

ASSESSING THE EFFECTS

6.9 While it is possible to predict which areas of law would come out of the current or
potential remit of negligence, it is harder to quantify the benefits and losses
involved. This is partly a problem with economic tools in general, in that it is hard
to put an economic value on principles or simplification. Partly, however, it is due
to the lack of a reliable dataset covering current amounts of compensation and
the circumstances in which cases against public bodies would be settled.

6.10 To give an idea of the current scale of liability, compensation figures derived from
notes in departments’ annual accounts were helpfully provided by Her Majesty’s
Treasury. This involved the review of the accounts for larger government
departments and the analysis of liability.6 The figures are broken down as
“special payments” and “provisions”. “Special payments” cover, among other
things, personal injury claims by employees, severance payments to employees
and ex gratia payments. “Provisions” cover the future liability of government
relating to identifiable liabilities, for instance where there is a high chance that a
medical negligence case will have to be settled. These may not accrue in that

6
The terminology and accounting methods are derived from the Financial Reporting Manual
and Managing Public Money.

119
 particular year but amount to a quantifiable draw on public funds at some point in
the future. For the years 2005-2006 and 2006-2007, the accounts showed the
following:

Type of liability 2005-2006 2006-2007

“Special payments” £136,196,000 £139,037,000

“Provisions” £11,725,003,000 £11,996,454,000

6.11 The largest components in “provisions” relate to medical negligence and future
payments under the Coal Health scheme operated by the Department for
Business, Enterprise and Regulatory Reform. For instance, at 31 March 2006,
the provision for the relevant NHS budget for clinical negligence amounted to
£6,788,608,000.

6.12 Excluded from these figures are “contingent liabilities”. These are an assessment
of potential liabilities which are difficult to quantify accurately, as they are
contingent on certain events happening. Such potential liabilities would include
negligence claims that a public body expects to defend successfully. Records of
these are entered as a note on the accounts in case some of them do accrue. To
give an idea of magnitude, in 2005-2006 these amounted to £5,480,822,000.

6.13 With this in mind, we have attempted to assess the effects in private and public
law of our suggested options for reform.

120
 Private Law
6.14 In private law, the effect of the suggested scheme is to cushion those areas
regarded as “truly public” against any changes in liability in negligence. As we
note above, our current conception of “truly public” captures certain activities in
pursuance of a “special statutory power” or where a public body acted under a
“special statutory duty”. This cushioning effect is represented in the diagram
below.

Diagram 2: Future benefits for public bodies

Area of public body
activity

Increased
justiciability and
wider conferral
of benefit in LC
options

Any future expansion

of tortious liability in
“truly public”
areas if LC options not
adopted

Current liability in tort

Threshold
condition of
“truly
public”
Liability in negligence, Degree of Competence
Serious fault, harder to
normal tests relating to
prove than breach in
standard of care and
“normal” negligence.
breach.

Benefits

Potential future benefits

Existing liability that remains

Costs

6.15 The effects of the scheme in expanding liability are difficult to accurately assess
in the absence of detailed government figures on liability, which we have been
unable to obtain. We are concerned to improve our ability to quantify the costs
and benefits of our approach to both public bodies and claimants. But even in
their absence, it would be wrong to take lack of quantification as an absolute bar
to reform. Quite apart from the principled reasons for action, our analysis
suggests that, from Government’s point of view, the status quo is a high-risk
option in the medium to long-term. Problems with the quantification of the cost of
reform (or, for that matter, the status quo) should not force us to abandon an
assessment of the relative risks of reform and the maintenance of the status quo.

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6.16 In addition to the savings to public bodies resulting from the placing of existing (or
future extensions of) normal negligence liability into the new serious fault regime,
our suggested approach to joint and several liability will assist public bodies. If
the courts can equitably assess the actual responsibility of a public body on the
given facts of a case, that would be particularly important for regulators such as
the Competition Commission or the Food Standards Agency.

6.17 Lastly, where Parliament feels that a particular body requires special protection,
then Parliament can enact specific protection for the body, as is the case with the
Financial Services Authority under section 102 of the Financial Services and
Markets Act 2000. An alternative parliamentary protection could come in the form
of specific caps to liability. This may be of particular use where the Government
was worried that a single action could lead to very large damages. This could
occur in competition cases, where the regulator has taken action on the basis of
seriously flawed market analysis. We see this as being clearly within the
principled approach we advocate. There may be policy areas in which the
appropriate modification to the corrective justice principle is immunity. We feel
that it is for the democratically elected Parliament to make that judgement.

6.18 With regard to the general claim that any imposition of liability would lead to an
overly defensive strategy on the part of public bodies, we stress that this position
is not supported by general research. In Appendix B, we have analysed the
research into the effects of liability on public bodies and this merely shows that
liability is a factor in decision making but is not an overarching one.

6.19 We would welcome any further information from consultees on the

quantitative and qualitative effects of imposing liability on public bodies.

Public law
6.20 As we explained earlier in Part 4, in order to assess the effect of our proposals in
public law, we undertook an internal exercise in which our proposed scheme was
applied to a selection of judicial review cases. In doing this, we applied the
scheme to 310 cases where there was a substantive hearing in a relevant
matter.7 Of these cases, the application was allowed in 121 cases. In these 121
cases, our assessment was that “serious fault” could be made out in only 18
cases. Of those 18 cases, a mere nine satisfied the other elements of the
proposed test, such that damages could be awarded by the court. These 18
cases are listed in Appendix C.

6.21 In short, the application of our proposed public law test would have resulted in the
possibility of damages being awarded in less than 3% of the cases heard in the
whole of 2007. This represents a very minor increase in the number of cases in
which damages were awarded already and certainly does not suggest that public
bodies would be exposed to a massive expansion in liability.

7
These cases were drawn from the Administrative Court listings in 2007. We excluded
cases concerning preliminary issues, such extensions of existing orders. We also excluded
appeals by way of case stated in criminal matters, as these would not be “relevant cases”
for the purposes of the scheme we have outlined.

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6.22 As outlined in Part 4, the serious fault test would be modelled, in part, on the EC
law test and would go far beyond that required to establish illegality or
negligence. The intention is to provide suitable protection for public bodies whilst
still facilitating the ability of citizens to obtain compensation for seriously
substandard administrative action. However, we recognise the legitimate
concerns of those potentially affected by any changes and agree that steps
should be taken to address these concerns.

Possible pilot programme

6.23 Our research is open to the objection that it does not take account of possible
changes in litigation behaviour by claimants if compensation were to become
generally available in judicial review. One way to test this would be to establish a
voluntary pilot programme within a small number of central government
departments.

6.24 This scheme would be engaged following a successful judicial review application.
If an application for judicial review against a participating department is
successful in the Administrative Court then the applicant would be given the
option of having their case referred to the pilot programme for an assessment as
to whether damages would be payable under the Law Commission’s suggested
scheme. In making this assessment, the programme adjudicator would apply the
suggested public law tests of conferral of benefit, serious fault and causation to
the facts at hand. If the tests were satisfied by the applicant, then compensation
could be payable by the department.

6.25 Additionally, the pilot programme could embrace applications in which the
department concedes the point raised in the application and takes remedial
action. In such cases, there would be no judgment from the Administrative Court
but if our proposed scheme were implemented then it could become a factor in
the settlement process.

6.26 This trial programme would provide empirical evidence as to how the suggested
public law scheme would work in practice, and would provide some indication of
the number of cases where the test is made out and the extent of damages
payable.

6.27 In assessing the amount of any damages payable, it is suggested that the
programme’s adjudicator be guided by damages awarded by the relevant
ombudsman.

6.28 In order to ensure meaningful results from the pilot programme, it would be vital
to publicise widely the programme both within government and professional
publications for lawyers. Additional outreach to potential claimants could be
achieved through the websites of participating departments, the Ministry of
Justice and the Courts Service.

6.29 Any publicity should highlight that the monetary remedy is available as an
additional and separate remedy to those already available, in order to monitor
whether this leads to an increase in claims. This possibility could be recorded by
requiring a claimant who has been through the pilot programme to fill in a simple
survey considering whether they would have brought their claim had the
monetary remedy not been available.

123
6.30 Lastly, and as a practical point, Chapter 2 of Managing Public Money requires
such schemes either to be very temporary or have a statutory footing.
Considering the nature of the claims and the necessity to publicise any pilot
scheme, it is unlikely that a very temporary scheme would provide useful data.
Consequently, a statutory footing would be needed.

6.31 If this pilot programme were undertaken and if it were sufficiently well publicised
then it should provide information on both the effect that the Law Commission’s
scheme would have on the level of liability and whether the creation of a
monetary remedy would lead to an increase in judicial review cases.

6.32 We would welcome suggestions as to the feasibility and possible structure

of a public law pilot programme for a limited number of central government
departments.

CONCERNS WITH THE APPLICATON OF THE TEST IN PRACTICE

6.33 There is a further concern relating to the application of any given test, which is
that it could be applied in a way which was not intended. The particular concern
is that the courts might extend the notion of “serious fault” to bring it closer than
we intend to normal negligence.

6.34 We recognise the power of this objection. But we think that it can be
exaggerated. First, the judges would have available to them our final report. In
that report, we would both make clear, by example and explanation, what we saw
as the proper calibration of “serious fault” as a criterion; and we would explain the
principle behind it. Where a new test is enshrined in legislation and is based on a
principled approach, we believe that it is more likely that the sort of extension
feared would not come about.

6.35 Secondly, we could take steps in the legislation itself to make clear the
seriousness of serious fault. We would consider with Parliamentary counsel
whether it would be appropriate to include examples in the legislation, or to
include a non-exhaustive list of features which may tend towards a finding of
serious fault.

6.36 Thirdly, building on the approach taken by the then Lord Chancellor’s Department
and the Judicial Studies Board to the coming into force of the Human Rights Act
1998, it might be appropriate to engage on a specific training and education
programme with the judiciary and others.

Avoiding administrative disruption

6.37 There is a concern that any possible expansion in liability would lead to the
disruption of administrative behaviour. This is a concern about the way in which
changes to liability impact on the way in which administration is conducted. In our
conversations with officials, we have become aware of issues that arose,
particularly, in the implementation of the Freedom of Information Act 2000 and
the Corporate Manslaughter and Corporate Homicide Act 2007. We should make
it clear that this did not consider the desirability of those reforms, or undermine
the Government position. Rather, it concerned possible consequential aspects of
reform and their effects on the behaviour of officials.

124
6.38 By “administrative disruption” we mean a concept distinct from “defensive
administration”. Administrative disruption occurs when there is an increase for
whatever reason of the burdens placed on civil servants or other public officials in
the conduct of their business. This is different from “defensive administration”,
which describes the situation when, following a change in the liability regime, the
performance of a public body is inhibited – for example, it backs away from
certain policy goals or reduces service delivery – because it seeks to reduce its
potential to be exposed to liability.

6.39 Whilst we accept that it is possible that changes made to the way public bodies
act can cause “administrative disruption”, we argue that there is little or no
evidence to suggest that changes to liability automatically lead to “defensive
administration”.8 Furthermore, whilst it is accepted that certain changes to the
interface between the citizen and the state can cause administrative disruption,
steps can be taken to reduce this to a minimum. We believe that activities such
as appropriate training and the effective communication of the suggested
changes to highlight the outcomes that the changes are intended to achieve
would be particularly effective.

LESSONS FROM THE FREEDOM OF INFORMATION ACT 2000

6.40 As was noted in Part 1 and above, there is a perception that the Freedom of
Information Act 2000 has created an unduly heavy burden on administrators. It is
suggested that the Act has caused substantial “administrative disruption” and the
operation of the Act reduces the quality of internal decision making.

6.41 Section 1(1) of the Freedom of Information Act 2000 creates a general right to
information held by public bodies. This general right is subject to a series of both
absolute and qualified exemptions, which are listed in Part II of the Act. In the
case of qualified exemptions, section 2(b) provides that “in all the circumstances
of the case”, “the public interest” in not communicating the information to an
applicant must outweigh the “public interest” in disclosing the information to the
applicant.

6.42 A key qualified exemption relating to policy formulation is contained in section

35(1)(a) of the Act. In essence, section 35 provides that information relating to
“the formulation or development of government policy” is exempt if, in all the
circumstances of the case, the public interest in maintaining the exemption
outweighs the public interest in disclosing the information.

6.43 One possible reading of the operation of section 35(1)(a) would be that, once the
section was engaged, assessing the public interest would allow for considerable
weight to be given to traditional factors such as maintaining the smooth running
of public bodies. This was the opinion of the First Division Association, the
organisation that represents senior civil servants, prior to the Act coming into
force.9 This would accord with earlier Civil Service attitudes to the release of

8
See further in this Part and in Appendix B on the impact of liability on public bodies.
9
P Birkinshaw, Freedom of Information: The Law, the Practice and the Ideal (2001) p 468.

125
 information in relation to the earlier Citizen’s Charter or when withholding
documentary evidence from a court under a Public Interest Immunity certificate.10

6.44 An alternate approach would be to give a strong preference to the release of

information to the public, in which case there would have to be strong reasons
provided for not releasing the information that go beyond preserving the smooth
running of public bodies. This would accord with modern literature on “good
governance” and the importance of “transparency” within government.11 Of these
two possible approaches, whilst the former might be preferable to civil servants, it
is the latter approach that has been adopted by the Information Commissioner
and the Information Tribunal.

6.45 An illuminating example of the potential for conflict between these two
approaches is the decision of the Information Commissioner which held that the
minutes of meetings of senior management at the Department for Education and
Skills could be disclosed. The Department argued that if the Information
Commissioner held the minutes to be discloseable, it would have a disturbing
effect on candid discussion, causing officials to act “defensively”.12 According to
this argument, there is a strong public interest in protecting good policymaking.
However, the Information Commissioner held that such an approach would mean
that the exemption in section 35 would essentially become “absolute”, and
decided that the public interest in “transparency and understanding policy
decisions” prevailed.13

6.46 The Information Commissioner’s interpretation can be justified on the basis of the
underlying policy behind the Act, as well as the structure of the Act.14 However,
this does not remove the fact that there is clearly a legitimate disagreement
concerning the “public interest” test in relation to the disclosure of information
relating to policy formation. If the current interpretation was the approach
intended by the drafters of the Freedom of Information Act 2000, then there has
clearly been at the very least a breakdown in communication within the civil
service.
10
Citizen’s Charter; Code of Practice on Government Information (1994). On PII certificates,
see Conway v Rimmer [1968] AC 910; Halsbury’s Laws of England: Practice and
Procedure (Volume 37 Reissue) para 590.
11
See further: C Hood and D Heald (eds), Transparency: the Key to Better Governance?
(2006); C Harlow, “Freedom of Information and Transparency as Administrative and
Constitutional Rights” (1999) 2 Cambridge Yearbook of European Legal Studies 285.
12
Here the Department seems to use the term “defensively” in a broad sense, so as to cover
all negative effects on government processes. This usage of the term “defensively” is
different to the more precise concepts of “administrative disruption” and “defensive
administration” put forward in this Consultation Paper. In the context of the case, the
effects to which the Department was referring should properly be categorised as
“administrative disruption”.
13
Decision Notice FS50074589, 4 January 2006, p 10. See also Office of Government
Commerce v Information Commissioner [2008] EWHC 737 (Admin), [2008] All ER 169.
14
See further: White Paper, Your Right to Know Cm.3818 (1997). See also: Speech by Rt
Hon Tony Blair, Campaign for Freedom of Information Annual Awards Ceremony, 25
March 1996, http://www.cfoi.org.uk/blairawards.html (last visited 16 June 2008); Speech by
Lord Falconer to the Campaign for Freedom of Information, St Brides Institute, 1 March
2004, http://www.dca.gov.uk/speeches/2004/lc010304.htm (last visited 16 June 2008); Rt
Hon Gordon Brown, Speech on Liberty, University of Westminster, 25 October 2007,
http://www.pm.gov.uk/output/Page13646.asp (last visited 16 June 2008).

126
 THE EFFECT OF THE CORPORATE MANSLAUGHTER AND CORPORATE HOMICIDE
ACT 2007
6.47 This Act entered into force on 6 April 2008.15 Section 1 of the Act creates a
criminal offence of corporate manslaughter in England and Wales, and Northern
Ireland and an offence of corporate homicide in Scotland. By section 1(2)(b) this
applies to “a department or other body listed in Schedule 1”, and by section
1(2)(c) “a police force”. Schedule 1 lists the current government departments and
other public bodies to which the Act applies.16

6.48 The effect of this is to make central government departments liable for the new
offence of corporate manslaughter. This represents a significant change in their
legal position, as until the entry into force of this Act, departments as a corporate
body had enjoyed immunity from criminal proceedings through the operation of
Crown Immunity. Consequently, the effect of the Corporate Manslaughter and
Corporate Homicide Act 2007 is to impose another potential type of liability to
government. Though very few prosecutions are envisaged, it is now necessary
for senior civil servants to plan for the possibility of police investigations and the
consequent disruption that this could cause to the smooth running of a
department. This would, on the face of it, go far beyond the sort of investigation
from the Health and Safety Executive with which departments currently deal.

6.49 Consequently, the Corporate Manslaughter and Corporate Homicide Act 2007
can be seen in the same light as the Freedom of Information Act 2000. Both Acts
are changing the culture within the civil service, and though they may lead to
wider benefits, they still can entail considerable administrative disruption.

THE IMPLICATIONS OF THE CONCERN WITH ADMINISTRATIVE DISTRUPTION

6.50 Our research on the impact of liability on public bodies has been concentrated on
the issue of “defensive administration”. “Administrative disruption” seems to be a
distinct phenomenon, and one which we should consider seriously. Its effects and
underlying dynamics may be significantly different from those examined in our
research on “defensive administration” (although we would also expect there to
be similarities).

6.51 One point that seems already apparent is that the administrative disruption is
driven by fears of political and policy costs, not monetary costs alone. Thus
where civil servants avoid writing things down so there is no information to
disclose under the Freedom of Information Act, they are motivated by the fear of
the adverse effects of disclosure. Those adverse effects might be straightforward
political embarrassment to the Government, or they might be the disruption of the
smooth process of developing policy. It is important to recognise that there is
nothing necessarily inappropriate about these fears, which reflect the proper
duties of civil servants.

15
Corporate Manslaughter and Corporate Homicide Act 2007 (Commencement No 1) Order
2008, SI 2008 No 401.
16
With changes to the machinery of government, it is periodically necessary to update this
list. See for example: Corporate Manslaughter and Corporate Homicide Act 2007
(Amendment of Schedule 1) Order 2008, SI 2008 No 396.

127
6.52 It is obvious that the notion of administrative disruption might have implications
for our project. We might draw the conclusion, for instance, that the fear would be
illusory on the public law side, because there we are proposing simply adding a
new remedy where the public body has already been found to have acted
unlawfully. It is unlikely that the payment of compensation will inflict additional
political or policy costs to those already incurred by the finding of the court. On
the other hand, the vulnerability of public bodies to liability for a greater range of
conduct on the private law side might occasion such costs which would not
otherwise have existed.

6.53 It seems to us that to assess properly the possible effects of our suggested
scheme on administrative performance and to evaluate the concerns of civil
servants, it would be beneficial to undertake a distinct piece of small-scale
qualitative research. This could take the form of a semi-structured interview with
civil servants about their reactions to the Freedom of Information Act 2000 and
the Corporate Manslaughter and Corporate Homicide Act 2007. In particular, the
research could address both the sorts of changes in practice that have occurred,
and the motivation for those changes. We intend to discuss with Government the
practicalities of undertaking such research.

6.54 We would then be in a position to assess the relevance of the concern with
administrative disruption to our provisional proposals, and, where appropriate, to
consider ways in which it could be mitigated or eliminated.

6.55 We would be grateful for comments on the phenomenon of administrative

disruption and its relevance to our provisional proposals.

COMMON LAW LIABILITY: A CAUTIONARY TALE

6.56 The Australian insurance crisis of the late 1990s and early 2000s provides two
salutary lessons. First, it provides a cautionary tale of what can happen if liability
in negligence is left to expand uncontrolled. Secondly, it illustrates that law reform
will always be most effective and enduring when it is conducted on a principled
basis.

The Australian insurance crisis

6.57 During the Australian insurance crisis two major insurance companies collapsed
and insurance premiums became exorbitantly expensive, and in some cases,
cover was not available at all. While not-for-profit and adventure tourism
organisations were said to be the hardest hit, it was also recognised that public
agencies had “serious problems”.17

6.58 The crisis was seen to affect adversely the very fabric of community life:

Results have included the cancellation of community festivals,

carnivals, art shows, agricultural shows, sporting events of all kinds,
country fetes, music concerts, Christmas carols, street parades,
theatre performances, community halls, and every manner of outdoor
event. The Panel has been informed that some schools and

128
 kindergartens are not able to offer the facilities they would wish and
some have had to close.18

6.59 The government believed that one of the factors contributing to the crisis was
“unpredictability in the interpretation of the law of negligence”, which the
government saw as driving up premiums.19 Within Australia, there was a widely
held view that it had become too easy for plaintiffs to succeed in personal injury
cases and that the damages awarded were too high.20 The frequency and nature
of claims against public bodies, particularly local councils and shires, was of
particular concern. Some local government bodies faced average public liability
premium increases of 30 to 50% in 2002, with “many examples of increase
beyond this range – up to 100 percent in several cases and 700 in one case”.21

Establishment of the Ipp Panel

6.60 To address this situation, the Commonwealth, States and Territories jointly
agreed to appoint an expert panel to examine the laws of negligence, chaired by
Justice David Ipp of the New South Wales Court of Appeal (the Ipp Panel). The
terms of reference given to the Panel were very specific about the assumptions
that were to underpin the inquiry:

The award of damages for personal injury has become unaffordable

and unsustainable as the principal source of compensation for those
injured through the fault of another. It is desirable to examine a
method for the reform of the common law with the objective of limiting
liability and the quantum of damages arising from personal injury and
death.22

6.61 The Panel was charged with developing and evaluating “principled options” to
limit liability and damages awards and were also required to “address the
principles applied in negligence to limit the liability of public authorities”.23

17
Towbridge Consulting Ltd, Public Liability Insurance: Practical Proposals for Reform (2002)
p ii.
18
Panel of Eminent Persons, Final Report: Review of the Law of Negligence (2002) para
1.34.
19
Australian Government, The Treasury, Joint Communiqué: Ministerial Meeting on Public
Liability, Melbourne, 30 May 2002.
20
Panel of Eminent Persons, Final Report: Review of the Law of Negligence (2002) para 1.4.
21
Australian Senate Economics Reference Committee, Report on the impact of public liability
and professional indemnity insurance cost increases (22 October 2002) p 11.
22
Panel of Eminent Persons, Final Report: Review of the Law of Negligence (2002) Terms of
Reference.
23
Above.

129
 Findings of the Ipp Panel
6.62 The Ipp Panel found that there was a strong community perception that the law of
negligence as it applied in the courts was unclear and unpredictable.24 The Panel
made over 60 recommendations to reform the law of negligence, including
limiting liability for dangerous recreational activities, imposing limits on claims for
future economic loss, abolishing exemplary, punitive and aggravated damages
and shortening the limitation period.

6.63 In relation to public bodies, the Panel noted that cases involving decisions about
resource allocation and cases involving policy decisions were the two main areas
of concern to public bodies.25

6.64 The Panel considered that it was undesirable that the issues raised by these
cases be addressed in negligence actions for a number of reasons, including the
fact that courts are not well qualified to adjudicate upon the reasonableness of
decisions that are essentially political in nature. The panel recommended a policy
defence, which provided that a policy decision by a public body should not be
subject to challenge unless “the decision was so unreasonable that no
reasonable authority in the defendant’s position could have made it”.26

Subsequent legislative reform

6.65 The recommendations made in the Ipp Panel were adopted in a plethora of
legislative reforms across Australia. Concerning the liability of public bodies, state
legislatures tended to go much further than the recommendations of the Ipp
Panel. For example, the Civil Liability Act 2002 (NSW) uses the test of
Wednesbury unreasonableness when it is alleged that a public body breached a
statutory duty in exercising, or failing to exercise, one of its functions.27

Effect of reforms
6.66 It is said that the reforms have “clearly succeeded in reducing the number of
claims brought, and insurance premiums appear to have fallen as a
consequence”.28 The District Court of New South Wales, which has the busiest
civil claims list in Australia, reported a drop from over 23,000 in 2001 to under
8,000 cases in 2005. It should be noted that these totals relate to all negligence
actions, not just those against public bodies.

6.67 While the Ipp reforms appear to have achieved their primary aim, debate
continues in legal and wider circles about whether some of the new legislation
has gone too far. Various commentators have suggested that the charged
political and economic context in which the reforms took place has resulted in the
abandonment of rationality and sound principle in the development of public
liability law in Australia.

24
Panel of Eminent Persons, Final Report: Review of the Law of Negligence (2002) para 1.5.
25
Above, paras 10.2 to 10.3.
26
Above, Recommendation 39.
27
Civil Liability Act 2002 (Cth), s 43.
28
Speech given by Justice David Ipp at the London School of Economics, 12 March 2008.

130
6.68 Justice Ipp himself has criticised extra-judicially the fact that some of the reforms
exceed the Panel’s recommendations, commenting that public bodies have been
given “a host of new and powerful defences” and that “certain of the statutory
barriers that plaintiffs now face are inordinately high”.29 He argues that the use of
the Wednesbury test in determining public body liability is “in conflict with the
democratic principle that the Crown and government authorities should be treated
before the law in the same way as an ordinary citizen”.30

6.69 Professor Harold Luntz has expressed concern that “the recent waves of tort law
reform in Australia will not only exacerbate many of [the pre-existing] problems,
but they have also made the common law completely unprincipled”.31 Chief
Justice James Spigelman of the New South Wales Supreme Court has echoed
this scepticism, stating that the statutory intervention means that “in this area
Australian law is now unlikely to develop in any principled way”.32 Prominent legal
bodies such as the Law Council of Australia and the NSW Bar Association have
also been openly critical of the actions of Australian governments, and public
disquiet has been voiced about gains made by insurance companies following
the reforms.

6.70 In the UK, a further criticism could be made of the use of the Wednesbury test for
public body liability. It is likely that that inclusion of such a test in legislation would
be subject to challenge on human rights grounds. The European Court of Human
Rights has stated that it does not regard the Wednesbury test as suitable in all
contexts.33

6.71 What the Australian experience does clearly illustrate is the danger of sacrificing
balance and principle when implementing law reform in a crisis. We believe that
better reform progresses on a well-prepared and well-reasoned basis, and not in
a reactive and piecemeal way in order to assuage an unstable political and
economic situation. The time is now ripe for such principled reform in England
and Wales.

29
Justice D Ipp, “Themes in the Law of Torts” (2007) 81 Australian Law Journal 609, 613.
30
Above.
31
H Luntz, “The Australian Picture” (2004) 35 Victoria University of Wellington Law Review
879, http://www.austlii.edu.au/nz/journals/VUWLRev/2004/40.html (last visited 16 June
2008).
32
Justice J Spigelman, “Tort reform in Australia”, Address to the London Market at Lloyds (6
July 2004):
http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_speech_spigel
man (last visited 16 June 2008); also see “Negligence: Is Recovery for Personal Injury too
Generous?”, Speech given to the 14th Commonwealth Law Conference, London (14
September 2005):
http://www.lawlink.nsw.gov.au/lawlink/Supreme_Court/ll_sc.nsf/pages/SCO_spigelman140
905 (last visited 16 June 2008).
33
Smith and Grady v UK (1999) 29 EHRR 493; Hatton v UK (2003) 37 EHRR 28.

131
 PART 7
SUMMARY OF SPECIFIC POINTS FOR
CONSULTATION

INTRODUCTION
7.1 For convenience, this Part consolidates all of the specific points for consultation
from Parts 4, 5 and 6 of this Consultation Paper. It does not contain any
additional material or analysis.

7.2 We strongly encourage all interested parties to respond to us on the following

consultation points. We would also welcome views on the “modified corrective
justice” principle which we have adopted to guide our options for reform in this
Consultation Paper.

PART 4 – LIABILITY IN PUBLIC AND PRIVATE LAW

Overview of Current Problems

7.3 We would welcome comments on our analysis in paragraphs 4.36 to 4.57 of the
development of the duty of care in relation to public bodies. (paragraph 4.58)

7.4 We invite comments on the operation of joint and several liability in the context of
litigation against public bodies. (paragraph 4.71)

7.5 We would welcome more data on the frequency of use of misfeasance in public
office as a cause of action, and we would welcome views as to whether, and if so
when, it remains a useful cause of action. (paragraph 4.91)

Options for reform

7.6 Should the torts of misfeasance in public office and breach of statutory duty be
abolished? (paragraph 4.106)

7.7 We would welcome comments from consultees on this formulation of “truly

public” activity in relation to statutes and suggestions on other ways that such a
test could be formulated (paragraph 4.124)

7.8 We invite comments on our formulation of the “truly public” activity test in
paragraph 4.131 and whether it would act as a suitable “gatekeeper” to our
private law scheme. (paragraph 4.132)

7.9 We invite commentary on the operation of the proposed “conferral of benefit” test,
in the context of the scheme set out in this Consultation Paper. (paragraph 4.142)

7.10 We invite comments on the possible operation of a “serious fault” regime in the
context of the scheme outlined in the Consultation Paper. (paragraph 4.167)

7.11 Is the approach to causation outlined in paragraphs 4.168 to 4.172 satisfactory?

(paragraph 4.173)

7.12 Should the discretionary nature of judicial review remedies be preserved for
damages in the public law context? (paragraph 4.175)

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7.13 Based on our discussion in paragraphs 4.176 to 4.188, we would welcome
comments on the recovery of pure economic loss:

(1) In the public law scheme;

(2) In the private law scheme. (paragraph 4.189)

7.14 Do consultees agree that the courts should have discretion to abandon the joint
and several liability rule in “truly public” cases, or do consultees prefer another
technique for mitigating the rule? What factors do consultees think should guide
the courts in exercising their discretion? (paragraph 4.196)

PART 5 – RELATIONSHIP BETWEEN OMBUDSMAN AND COURT-BASED

OPTIONS
7.15 Do consultees think a stay provision would be a useful tool in ensuring disputes
are dealt with in the appropriate forum? What problems do consultees see with
the operation of the stay as described in paragraphs 5.31 to 5.37? (paragraph
5.38)

7.16 Do consultees think that the ombudsmen should have the power to make
references to the court of points on law as described in paras 5.43 to 5.46?
(paragraph 5.47)

7.17 Do consultees think that references from the ombudsmen should bypass the
permission stage before proceeding to the Administrative Court? (paragraph
5.53)

7.18 Do consultees agree that the statutory bar should be modified both in cases
where legal proceedings have been commenced and where there is a potential
remedy before the court? Do consultees agree that this should be done so that
the default position is that ombudsmen have discretion to investigate regardless
of the availability of a legal remedy? (paragraph 5.75)

7.19 We invite the views of consultees on our provisional proposal to abolish the MP
filter. Do consultees consider that the filter should be abolished outright, or that
there should be a “dual system” which would allow complainants the option of
making a complaint through an MP or of seeking direct access to the
Parliamentary Ombudsman? (paragraph 5.88)

PART 6 – EFFECT ON PUBLIC BODIES

7.20 We would welcome any further information from consultees on the quantitative
and qualitative effects of imposing liability on public bodies. (paragraph 6.19)

7.21 We would welcome suggestions as to the feasibility and possible structure of a

public law pilot programme for a limited number of central government
departments. (paragraph 6.32)

7.22 We would be grateful for comments on the phenomenon of administrative

disruption and its relevance to our provisional proposals. (paragraph 6.55)

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 APPENDIX A
PRINCIPLES UNDERPINNING REFORM

INTRODUCTION
A.1 The aim of this part is to provide a workable theoretical basis for our suggested
options for reform relating to the liability of public authorities in public and private
law. We take our lead from theories of tort law because tort law is concerned with
the situation where a claimant seeks redress against another party, which is also
the situation when a citizen seeks redress against a public body in public and
private law. Although we recognise that theoretical tort law scholarship is largely
concerned with the legal relationships between private individuals, we wish to
consider the extent to which it also applies to the legal relationships between
individuals and the state. In this regard, we consider the two broad types of tort
law theories – economic theories and corrective justice theories.1

A.2 We conclude that corrective justice, appropriately modified to reflect the nature
and function of the state, provides an adequate theoretical basis for our
suggested options for reform. In what follows, we attempt to demonstrate that not
only can corrective justice be applied to state liability but that it captures well the
situation when a claimant individual seeks redress against the state. Although
corrective justice imposes a duty on the state to put things right, the scope of
monetary compensation as a remedy must be limited to reflect the special
functions of the state and the special relationship it has with its citizens.

THEORIES OF TORT LAW: A BRIEF SKETCH

Economic theories
A.3 “Law and economics” has been a dominant strand in theoretical tort scholarship
in the United States since the 1970s, although its roots go back further.2 It
attempts to explain or prescribe features of tort law using economic concepts and
models. Economics theorists assume that, parties acting rationally will respond to
the threat of liability by taking precautions against causing harm to individuals up
to the point at which the costs of the precautions equal the costs of harm which
would result if the precautions were not present. However, the aim is not to
reduce the risk of the activity to zero but to ensure liability is set at its most
economically efficient level. The goal of tort law is to ensure that costs from
accidents are distributed in the most efficient fashion.

A.4 This is best illustrated by considering the hypothetical question of who should be
made liable for injuries to pedestrians in low-speed accidents. An economics
theorist would wish tort law to impose liability on car manufacturers, if, by
designing and installing “spongy” bumpers that would avoid or minimise injury,
this was the cheapest way to avoid accidents and their costs. This would mean,

1
Consideration of the normative and methodological debates about economic and corrective
justice theories of tort law traditionally applied as between private individuals is beyond the
scope of our limited discussion.
2
Seminal articles include R Coase, “The Problem of Social Cost” (1960) 3 Journal of Law and
Economics 1; and G Calabresi and A D Melamed, “Property Rules, Liability Rules, and
Inalienability: One View of the Cathedral” (1972) 85 Harvard Law Review 1089.

134
 of course, that liability would be placed on a party who had not “caused” the
accident in the normal sense.3

Corrective justice theories

A.5 An alternative explanation and justification for tort law is found in corrective
justice theories.4 Originally articulated by Aristotle,5 the core idea is that a person
who injures another has a personal duty to put that person back in the position
that they were in before the injury occurred. Modern corrective justice theories
developed in reaction to the pre-eminence of economics theory, and is now its
dominant challenger.

A.6 Corrective justice theorists claim that they can explain aspects of tort law better
than their economics counterparts. In particular, they say that only their theories
can account for what is considered a central feature of tort: its bipolar structure,
which can be explained in the following way. Tort law is based on the relationship
between two parties, the claimant and the respondent; indeed tort law rules
establish a legal relationship between the two. The relationship flows from the
injury caused by the respondent to the claimant. It is for the claimant to seek
compensation from the respondent, and the duty on the respondent to put the
claimant back in the position that he or she was in before the injury involves the
transfer of compensation from the respondent directly to the claimant.6 Corrective
justice theorists claim that economic theories cannot account for this bipolarity,
since what matters to economic theories is who can avoid the cost of accidents
most efficiently. This might mean that a party other than the respondent (that is,
the party who caused the injury in the normal sense) would be made liable.

A.7 It is important to note that even if corrective theories can explain and justify key
features of tort law such as its bipolarity, they are unable in and of themselves to
generate precise rules of substantive law. It is clear that corrective justice
excludes certain rules which would be incompatible with the theory itself, such as
those establishing a principle of strict liability; or conversely, a no-fault
compensation scheme in a particular area. Beyond that, corrective justice
theories are useful only as a guide.

THE THEORIES AND THE LIABILITY OF PUBLIC BODIES

A.8 How do these theoretical approaches work once we bring the state or a public
body back into the picture as respondent? Until recently, there seems to have
been comparatively little academic work in this area. In Britain, it could perhaps
have been thought that the principle that state officials should be subject to the
law on the same basis as the private citizen – a principle famously articulated by

3
This is the example used by Guido Calabresi in “Does the Fault System Optimally Control
Primary Accident Costs?” (1968) 33 Law and Contemporary Problems 429, 436 to 438, as
well as in his book, The Cost of Accidents (1970).
4
The leading scholars in the field include Ernest Weinrib and Jules Coleman. See for
example E Weinrib, The Idea of Private Law (1995) and J Coleman, The Practice of
Principle (2001).
5
Nicomachean Ethics, Book V.
6
W Lucy, Philosophy of Private Law (2007) p 270.

135
 Dicey7 – would be sufficient justification for tort law as it applied to relations
between the state and individuals. However, particularly since an important article
by Daryl Levinson in 2001,8 the issue has helpfully been addressed by American
academics.

A.9 Levinson attacks the applicability of both economic and corrective justice theories
where the state is the respondent in tort law. In this he has been apparently
successful: a recent article considers that there is “an emerging consensus
among legal scholars that government tort liability lacks a coherent justification”,
and refers to similarly founded doubts expressed by the US Supreme Court.9
Before considering Levinson’s position, it should be noted that tort law as it
applies to public bodies is quite different in the US, and the American approach to
tort law reflects these differences. However, the broad thrust of the arguments
and counter-arguments are applicable in a UK context.

Economic accounts and state respondents

A.10 Levinson’s criticism of economic accounts challenges their assumption that public
authorities respond to liability rules in a similar way to private individuals as
rational maximisers. He forcefully argues that government actors respond to
political, not economic, incentives.10

A.11 In particular, unlike private enterprises operating in a market environment,

government is not organised to maximise profits but to respond to the
preferences of voters. Voters themselves are not uniquely interested in
maximising collective or personal wealth: their preferences “may differ
systematically from market preferences, reflecting not just immediate self-interest
but altruism and individual and collective aspirations”.11 Giving effect to these
preferences may therefore “mean sacrificing some measure of wealth
maximisation in order to realise other social goals”.12 Levinson adds, however,
that we should not expect government officials to be completely faithful to
citizens’ preferences, since the control and selection mechanisms in politics are
much weaker than in those in economic markets.13

A.12 The upshot of all of this is that if the political cost of avoiding injuring others is
sufficiently high, government will be unlikely to make an investment even when it
is economically justified. Levinson gives the example of a policy of randomly
stopping and searching young men in high crime areas. Although the policy could
greatly increase tort liability, and so economically it is not acceptable, it could
conceivably have significant political rewards.

7
A V Dicey, Introduction to the Study of the Law of the Constitution (10th ed 1959) p 193.
8
D Levinson, “Making Government Pay: Markets, Politics and the Allocation of
Constitutional Costs” (2000) 67 University of Chicago Law School Review 345.
9
L Rosenthal, “A Theory of Governmental Damages Liability: Torts, Constitutional Torts,
and Takings” (2006) 9 University of Pennsylvania Journal of Constitutional Law 797, 799.
10
D Levinson, “Making Government Pay: Markets, Politics and the Allocation of
Constitutional Costs” (2000) 67 University of Chicago Law School Review 345.
11
Above, 355.
12
Above.
13
Above, 355 to 356.

136
A.13 Some scholars seek to model political behaviour in a similar way to that in which
economists model economic behaviour. These scholars maintain that the
purpose of tort law is to change the behaviour of the relevant actors in a socially
useful way, but they wish to free their models from the flaws of economic
models.14 Levinson criticises this practice, and our review of empirical and
theoretical work on decision-making in public bodies and the indirect evidence of
judicial review discussed in Appendix B leads us to reject such attempts to
produce generally predictive models of political behaviour. We conclude there
that the reaction of public bodies to liability is context-specific and significantly
determined by external factors.

Corrective justice and state respondents

A.14 Levinson also criticises the application of corrective justice theories where the
respondent in tort law is a public body. His central and powerful point is that

compensation ultimately comes from the pockets of taxpayers [which]

… attenuates the connection between moral responsibility and the
burden of rectification. Corrective justice theories ground the duty to
rectify in the causation of moral harms. But taxpayers do not “cause”
constitutional violations in any intuitive sense of causation, nor are
they morally responsible for constitutional wrongdoing.15

A.15 Levinson is essentially denying that the bipolarity which is at the heart of
corrective justice applies in the state liability context. There are instead three
distinct parties which are relevant – the claimant citizen, the respondent public
body, and the taxpayer. We do not accept this criticism to the extent that it
implies that the taxpayer materially affects the bipolar relationship between the
citizen and the state (it is, of course, quite a different thing to say that the
taxpayer “ultimately pays” when the state pays compensation). Corrective justice
requires that the respondent use his or her resources to compensate the injured
party. Just because government resources are raised in taxes does not mean
they do not belong to the government; there is no legal sense in which taxpayers
own the taxes they have had to pay. To assert otherwise is deny that the state
has its own legal personality.

A.16 Levinson, in a further attack on the application of corrective justice to state

liability, questions the possibility of “a collective entity like government [qualifying
as] a moral agent”.16 However, we routinely evaluate government actions in moral
terms, and this is generally true even of government actions which cannot be
attributed to particular officials. The same is true of companies: in English law,
they can commit crimes (provided the prescribed punishment can be imposed
upon a company), and moral culpability and criminal liability go hand in hand.17

14
For a good example of a “political” model, see L Rosenthal, “A Theory of Governmental
Damages Liability: Torts, Constitutional Torts, and Takings” (2006) 9 University of
Pennsylvania Journal of Constitutional Law 797.
15
D Levinson, “Making Government Pay: Markets, Politics and the Allocation of
Constitutional Costs” (2000) 67 University of Chicago Law School Review 345, 408.
16
Above.
17
At least, outside the ambit of purely regulatory offences.

137
A.17 Recent changes to the law in England and Wales by the Corporate Manslaughter
and Corporate Homicide Act 2007 are instructive here. The Act reflects an
attempt to make the criminal responsibility of companies less dependent on the
need to attach responsibility to an individual director. Rather than requiring a
single human mind (which therefore has to be the “controlling mind” of the
company) to satisfy the mental element of the offence, the Act provides for a
more genuinely corporate view of the mental element of criminal responsibility.
The Act expressly extends criminal responsibility for manslaughter to
Government departments (albeit with certain exclusions). There is thus now
official recognition that Government departments, just like companies, can be
blamed for their activities (or inactivities), and be held liable for the harm they
cause.

A.18 We therefore reject Levinson’s criticisms in this context and accordingly consider
that, as a general principle, corrective justice survives as a justification for state
liability in tort.

THE DIFFERENCE THE STATE MAKES

A.19 However, the fact that the state’s resources derive from taxpayers and are to be
used for public benefit is important when considering the nature or content of the
state’s duty to put things right. It is clear that that diverting the state’s resources
to compensation raises issues that are different from those raised by the
diversion of resources from a private respondent to a private claimant.

A.20 From an economic perspective, the state intervenes in markets to prevent market
failure; such interventions are in the public interest. Markets fail when they do not
deliver an optimal total welfare. For example, in nearly all advanced countries
there is substantial state intervention in the supply of medial services because
leaving it to the market would result in unacceptable social and individual
consequences. On this view, the state is expending money for purposes which,
by definition, could not be secured by private actors: if the state did not provide
them, no-one would.18 And, again by definition, if the state did not provide them, a
negative effect on overall welfare would result. The social significance of money
in the hands of the state is therefore different from that in the hands of private
individuals.

A.21 When money passes in compensation from a private claimant to a private

respondent, the respondent loses the opportunity to spend it for their own benefit;
instead the claimant is given the opportunity to spend it for his or her benefit.
When money passes from a public respondent to a private claimant, however,
money legitimately earmarked for expenditure in the public interest is diverted to
the individual benefit of the claimant.

A.22 In corrective justice theories, the paying of compensation from the respondent to
the claimant constitutes a moral gain, since the end result is an improvement in
the situation of the injured claimant. However, where the respondent is the state,
there will also be a loss in general welfare provision resulting from the diversion
to the injured individual of resources earmarked for correcting market failure.
18
A qualification is necessary because private charity is capable of providing some of these
goods and services, sometimes even on a universal basis (as, for instance, in the provision
of lifeboat services in Britain).

138
 THE DUTY TO REPAIR AND STATE RESPONDENTS
A.23 The above discussion illustrates that the duty to repair and the payment of
compensation has a special moral dimension when a public body is the
respondent. What should the impact be of this additional complexity on the
theoretical approach to state liability? In what way should the moral feature of
public resources modify the duty to repair which corrective justice imposes on the
public body?

A.24 Corrective justice accounts start with the notion that there is an equilibrium – a
pre-existing state of things – which is upset by the respondent. Part of that state
of things is the nature of the relationship between the parties. Therefore, it will be
useful to consider the differences between the relationships between private
citizens on the one hand, and the citizen and the state on the other. The nature of
these pre-existing relationships could signal what differences in the form of repair
might be appropriate.

A.25 Individual citizens enter relationships with each other voluntarily. Beyond these
voluntary relationships, individuals generally expect little more than that other
people will leave them free from (wrongful) injurious interference. If an individual
injuriously interferes with another individual, there is no obvious relationship
between the individuals upon which one could hang some form of remedy other
than monetary compensation. It simply diminishes the personal property of the
respondent and enhances that of the claimant, typically at the same time, thus
minimising the requirement for any continued non-voluntary relationship between
the two individuals. Monetary compensation respects an individual’s autonomy in
their relations with others.

A.26 Individuals’ relationships with the state are very different. An individual stands in
a life-long and generally non-voluntary relationship (or series of relationships)
with the state. In a liberal democracy, individuals generally have higher
expectations about how the state will behave than they do of their fellow citizens.
The state will of course impose tax and regulate an individual’s voluntary
relations with other citizens. But it will also provide benefits, and in this regard it is
fairness of treatment, not non-interference, that individuals expect. Cane argues
that the state is different in another important respect:

Government may legitimately coerce citizens to act or refrain from

acting in ways determined by the government in order to further
community goals at their expense. This legal power of legitimate
coercion is not possessed by any ordinary citizen, however great their
de facto power over the lives of other citizens may be. Government is
different from its citizens in having power which they do not have and,
in having responsibilities to the community as a whole which they do
not have…in order to control the exercise of the legitimate coercive
powers of the government we may be justified in imposing certain
liabilities on government which do not also rest on citizens and in
order to enable it to fulfil its responsibilities to society as a whole, we
may be justified in relieving government of certain liabilities to which
its citizens are subject.19

19
P Cane, “Damages in Public Law” (1999) 9 Otago Law Review 489.

139
A.27 Since the state spends money raised in taxes in the public interest and is
concerned to deliver benefits to individual members of the public, it is fair to
expect the state to act in accordance with the rules of natural justice and an
appropriate level of administrative competence. In principle, we can expect more
from the state. However, it does not necessarily follow that court-based
compensation is the appropriate remedy in all, or even many cases.

A.28 As we showed in Part 3, citizens want a variety of remedies when they

experience substandard administrative action. These include explanations,
apologies and improvements in the future. Citizens’ redress may be facilitated
better through avenues other than the courts and the provision of compensation.
Thus the first modification to the duty to repair where the respondent is a public
body is to offer remedial mechanisms other than money.

A.29 Where monetary compensation is sought, we believe it is appropriate to modify

the duty to repair to limit the exposure of the state in ways that it would not be
appropriate to limit the exposure of a private citizen. “Limiting exposure” may take
the form or setting a higher threshold for when the duty to repair will arise or
placing caps or limits on how much compensation will be paid when the duty to
repair has arisen. As set out in Part 4, we have preferred the former approach in
limiting the exposure of public bodies pursuant to the corrective justice principle.

EQUALITY: A LIMIT TO THE MODIFICATION OF THE DUTY TO REPAIR

A.30 However, limiting the exposure of the state should only go so far. This should be
balanced against the general principle of equality that “like cases should be
treated alike”.20 This means that government should be treated in the same way
and be subjected to the same rules as private persons to the extent that it really
is “like” private persons.

A.31 We consider that “like cases” as between public bodies and private persons
should at least include those functions or activities carried out by the state that
are also performed by the private sector and where the “public” or “private”
quality makes little difference to its performance. This would include, for example,
NHS doctors and consultants, and teachers employed in the public sector.21 It
would also include a police officer driving a car down a road in the normal course
of his duties. By contrast, where a public body is exercising a statutory power or a
prerogative power, this will move them into the sphere of “truly public” activity,
where there is no private sector equivalent. For example, a police officer arresting
a suspect or driving “under a blue light” is exercising a statutory power and thus
should be subject to the modified duty to repair.

A.32 In situations where there is a direct counterpart in the private sector to an activity
carried out by a public body, it is inconsistent with the equality principle that the
duty to repair be modified. The limit to exposure should only apply to those
activities which are exclusively carried out by the state. Part 4 sets out our
proposed test for delineating this sphere of “truly public” activity.

20
T Cornford, in Towards a Public Law of Tort (forthcoming) ch 1, considers that equality is
tied up with the notions of government under law and the rule of law.
21
See C Booth and D Squires, The Negligence Liability of Public Authorities (2006) para
4.10.

140
 OUR PROVISIONAL POSITION
A.33 We now summarise the position we have reached in the course of this Appendix:

(1) In general, the principle of corrective justice underpins the relationship

between the state and individual claimants;

(2) However, in certain circumstances the normal principle of corrective

justice needs to be modified. This is in order to take into account certain
features of the relationship between the state and potential claimants;

(3) In relation to monetary compensation, the relationship between the state

and an individual claimant has a different moral complexion to the
relationship between private individual claimants;

(4) An individual’s relationship with and expectations of the state are such
that they should look first to non-monetary remedies against the state;

(5) However, where compensation is in issue, there is a moral case for

limiting it to particularly serious conduct where the state is the
respondent;

(6) This modification only applies where the state is undertaking “truly public”
activity. Therefore, it does not apply where the impugned activity could
equally have been carried out by a private individual.

141
 APPENDIX B
THE IMPACT OF LIABILITY ON PUBLIC
BODIES

INTRODUCTION
B.1 Central to arguments about the extent of public body liability is the question of the
effect of liability on the behaviour of public bodies. Broad assertions are often
made about the potential impact of liability with little empirical backing. Therefore,
in preparing this Consultation Paper, we searched a broad range of literature in
an attempt to develop an understanding of the impact of any change to the
underlying legal regime. This research encompassed the fields of law and
economics, social psychology, socio-legal studies, and public management,
policy and administration.

B.2 Our research confirmed that direct empirical evidence regarding the impact of
liability on public bodies in the UK is extremely limited. Therefore we have drawn
on indirect evidence concerning the impact of other accountability mechanisms in
the public sector, in particular judicial review.

B.3 We are aware of two particularly import studies which are currently being
conducted. First, Maurice Sunkin and colleagues at the University of Essex have
been researching the effect of judicial review on the quality of local authority
services. Secondly, Simon Halliday (Strathclyde University) and Colin Scott
(University College Dublin) and colleagues are conducting a study of the effects
of liability (largely tortious) on local authorities’ performance of road and highway
functions. This study will compare local authority behaviour in the Republic of
Ireland and Scotland. Fortunately, we have had the advantage of some advance
findings of both of these projects, but neither had been completed before the
publication of paper. Both will add significantly to the body of empirical knowledge
available on UK/Irish jurisdictions.

MONETARY REMEDIES AND POLICY CONCERNS

B.4 Courts frequently make broad assertions about the impact of imposing liability on
a public body. Whilst it is acknowledged that their principal obligation is to provide
a remedy for wrongs, courts have identified an array of countervailing policy
considerations which have frequently been deployed to deny liability: imposing
liability could impede the efficient use of public resources, encourage public body
employees to act in a defensive manner, and could risk flooding the courts with
litigation.

B.5 Conversely, the courts have also on occasion acknowledged that liability may
have beneficial consequences. In particular, it may encourage a higher standard
of administrative performance by public bodies.1

1
See Barrett v Enfield London Borough Council [2001] 2 AC 550 at 568; Phelps v Hillingdon
London Borough Council [2001] 2 AC 619 at 672.

142
 Defensive or better administration
B.6 Two divergent perspectives on the impact of liability have therefore emerged.
First, there is a concern that imposing liability will lead to “defensive
administration” or otherwise inhibit effective performance by public bodies.
Second, there is the view that placing a duty of care upon a public body will
improve the standard of administrative performance.

B.7 Both perspectives refer to behavioural changes of the same type. The difference
is one of magnitude. They differ regarding whether the imposition of liability is
seen as deterring carelessness to an appropriate degree, and results in effective
administration, or whether the consequence of imposing liability is “over-
deterrence” and a retreat into defensive practice.

The assumption that impact will be discernible

B.8 Embedded in the debate over whether increased liability would encourage better
administration or defensive practice is the assumption that changing the liability
regime will have a discernible impact upon administrative behaviour. Another
position is that changing the liability regime will have little or no impact upon the
practice of public bodies. A final proposition is that liability is only likely to play a
significant role in shaping administrative behaviour under certain conditions.

The kind of wrong

B.9 The impact of liability on public bodies may depend on the kind of wrong that the
imposition of liability seeks to deter. Illegality can take a number of forms,2 and it
should not be assumed that they are all equally responsive to a specific mode of
deterrence.

B.10 For some types of illegality it is plausible to hypothesise that monetary liability
could act directly to improve administrative performance, but for others monetary
remedies would act indirectly at best. The existence of a monetary penalty could
in theory provide public bodies with the incentive to deal with negligence-based
aspects of maladministration, such as delay or inattention, that could be
addressed through improvements in organisational processes. In contrast, where
the problem flows from a lack of resources, then monetary liability is likely to have
little impact on the provision of services. However, even here, it may well be that
the payment of damages highlights either an inappropriate distribution of
resources within a public body or conflicts embedded in the underlying policy.3

2
See P Schuck, Suing Government (1983) pp 4 to 13. Schuck identifies four sources of
government illegality: comprehension-based illegality, capacity-based illegality, motivation-
based illegality and negligence-based illegality.
3
For a discussion of “the tendency for implementers to be left to try to cope with the
dilemmas built into the policy itself” see G Fimister and M Hill, “Delegating implementation
problems: social security, housing and community care in Britain”, in M Hill (ed), New
Agendas in the Study of the Policy Process (1993) p 128.

143
 Opening the floodgates
B.11 A further concern is that a change in liability would lead to a substantial increase
in litigation.4 This could occur as a result of at least three distinct processes.
Firstly, a change in the liability regime might broaden the range of grounds upon
which claims could be brought. Secondly, a change in the liability regime may
lead to an increase in the propensity to claim with respect to a particular ground
for complaint. Third, changing the liability regime may lead to an increase in
vexatious and/or unmeritorious litigation.

B.12 Again, there is limited empirical evidence available upon which to ground
estimates of the likely impact of increased public liability. It is, however, well-
known in the socio-legal literature that decisions to litigate are not just influenced
by the absence or presence of a monetary remedy.5 There may be an increase in
litigation even when there has been no change in the liability regime.6 The
relationship between a liability regime and the propensity to litigate is by no
means straightforward.

B.13 Evidence from other jurisdictions may shed some light on the issue. In a recent
paper Markesinis and Fedtke argue that evidence from Germany indicates that
fears that extending liability will open the legal floodgates could well be
unfounded. In Germany state liability is more extensive and, in general, the
culture more litigious, yet state resources devoted to processing and defending
negligence cases remain relatively modest.7

Settlement
B.14 More subtly, a change in the liability regime may alter the way in which parties
engage with the process of litigation, and in particular the likelihood of settlement.

B.15 One can analyse this issue from a law and economics perspective by considering
the relative costs and benefits of going to court or settling the case before it
reaches that stage.8 If the claimant’s assessment of the benefits of litigating (net
4
The possibility of the floodgates being opened by increased liability was identified by
(among others) Lord Browne-Wilkinson in X v Bedfordshire County Council [1995] AC 633,
at 750 to 751. See also for example S Bailey, “Public Authority Liability in Negligence: The
Continued Search for Coherence” (2006) 26 Legal Studies 155, 175. The floodgates
argument has also been contested: for example by Stuart-Smith LJ in Capital and Counties
plc v Hampshire County Council [1997] QB 1004 at 1043 to 1044.
5
For example see H Genn, Paths to Justice: What People Do and Think about Going to Law
(1999).
6
For example, there was a significant rise in medical negligence claims in the 1980s and
1990s even though the liability regime did not change: P Cane “Consequences in Judicial
Reasoning” in J Horder (ed), Oxford Essays in Jurisprudence: Fourth Series (2000) 41, p
53.
7
B Markesinis and J Fedtke, “Authority or Reason? The Economic Consequences of
Liability for Breach of Statutory Duty in a Comparative Perspective” (2007) 18 European
Business Law Review 5. See alternatively B Markesinis and J Fedtke, “Damages for the
Negligence of Statutory Bodies: The Empirical and Comparative Dimension to an
Unending Debate” [2007] Public Law 299. See also Y S Lee, “Civil Liability of State and
Local Government: Myth and Reality” (1987) 47 Public Administration Review 160 for an
empirical study of the limited impact that three landmark cases had on the volume of
litigation against US local government in the subsequent three years.
8
See, for example, R Cooter and D Rubinfeld, “Economic Analysis of Legal Disputes and
their Resolution” (1989) 27 Journal of Economic Literature 1067.

144
 of costs) exceeds the settlement the defendant is willing to offer then it is likely
that the parties will be unable to settle and the case will go to trial. The
defendant’s settlement offer will, in turn, be shaped by their perception of the
costs they are likely to incur if the case proceeds to trial.

B.16 It follows that attaching a monetary remedy to a public law action would tend to
increase the claimant’s incentive to seek a trial but would at the same time
increase the amount of money a defendant is willing to offer in pre-trial
settlement.9 It is difficult to predict the net effect of these opposing forces in
advance. It will depend on the parties’ attitudes to risk, as well as institutional
factors such as the extent of the defendant’s discretion in offering settlements
and whether the costs of settlement and litigation fall in the same place.

B.17 There may also be other factors at play in a case that raises public law issues. A
private party can easily concede private rights. To settle, a public body might
have to admit unlawful conduct, and that could have implications for many other
cases. A public body might chose to defend a claim knowing that there was a
considerable prospect of failure. From a claimant’s point of view, in most judicial
reviews their principal object will be to secure the right decision from the
defendant, in which case compensation would perhaps be unlikely to distort the
process. On the other hand, it may be that the possibility of compensation would
simply complicate any negotiations for a settlement, and thus render a successful
settlement less likely.10

B.18 Again empirical evidence sheds little light on this issue. In the US moves have
been made in the opposite direction: imposing damage caps in tort cases.
Evidence indicates that this can have effects such as increasing the probability of
pre-trial settlement.11 The US literature also explores the “shadow effect” of highly
uncertain punitive damage awards in increasing the incentive for pre-trial
settlement: this debate is very similar in structure to our current concern.12

9
Under the present regime a proportion of cases are settled. Sunkin notes that “by the mid-
1990s only approximately one-sixth of all judicial review claims in England and Wales
reached a substantive hearing”: M Sunkin, “Conceptual Issues in Researching the Impact
of Judicial Review on Government Bureaucracies” in M Hertogh and S Halliday (eds)
Judicial Review and Bureaucratic Impact: International and Interdisciplinary Perspectives
(2004) 43, p 50. Not all claims that failed to reach a hearing should be taken to represent a
settlement.
10
It would of course always be open to the public body to exclude any compensation
payment as part of the settlement, if it were prepared to concede, for instance, the re-
taking of the decision.
11
Evidence on the varied experiences across US states is briefly reviewed in L Babcock and
G Pogarsky, “Damage Caps and Settlement: A Behavioural Approach” (1999) 28 Journal
of Legal Studies 341. The US literature on the reform of tort law relating specifically to
medical negligence (often focusing on the efficacy of damage caps in restraining the
damages awarded by juries) is both extensive and heavily contested. For example, D A
Hyman and C Silver, “Medical Malpractice Litigation and Tort Reform: It’s the Incentives
Stupid” (2006) 59 Vanderbilt Law Review 1085.
12
T A Eaton, D B Mustard and S M Talarico, “The Effects of Seeking Punitive Damages on
the Processing of Tort Claims” (2005) 34 Journal of Legal Studies 343.

145
 THE IMPACT OF LIABILITY ON PUBLIC BODIES – THE LAW AND
ECONOMICS PERSPECTIVE

Liability in the private sector

B.19 The deterrence approach to tort law has its roots in the law and economics
approach.13 It is assumed that parties acting rationally will respond to the threat of
liability by taking precautions against causing harm to others up to the point at
which the costs of continuing to do so equal the costs of the harm that is
expected to result if precautions are not taken.14 It follows that increased liability
deters negligent behaviour as parties seek to avoid the cost of tortious liability.

B.20 The discussion of state liability typically starts by taking this as a reasonable
account of the impact of the tort system on the private sector. It then proceeds to
examine whether it has similar relevance to the response of public bodies to
liability. This simple model is, however, at best a partial representation of how
private bodies respond to tortious liability. In practice the picture is much richer.

B.21 Research indicates that, in practice, liability may be effective in deterring some
sorts of harmful behaviour in some contexts, but not in others.15 Changing liability
regimes can trigger responses other than increasing the care being taken: for
example, firms may restructure production so that the activities most exposed to
litigation are performed by smaller producers with less to lose should they be
sued.16

B.22 The simple model also assumes that the direct monetary outlay associated with
litigation is producers’ main concern. A broader conception of the impact of
litigation might also acknowledge that bad publicity associated with being found
liable in negligence may have far-reaching consequences for reputation and
future demand for products or services. Organisations may rationally take greater
account of a liability regime than the size and frequency of successful negligence
actions might suggest.

Liability in the public sector

The retreat into defensive administration

B.23 Both sides of the debate over the impact of liability can be interpreted using a law
and economics approach. Those who see liability as promoting effective
administration are implicitly assuming that liability will give public bodies the

13
For example, R Posner, “A Theory of Negligence” (1972) 1 Journal of Legal Studies 29.
For an overview of this approach see L Kaplow and S Shavell, “Economic Analysis of Law”
in A Auerbach and M Feldstein (eds) Handbook of Public Economics (1999) 1161, or S
Shavell, Economic Analysis of Accident Law (2003) NBER Working Paper 9694.
14
There is no assumption that it is rational to reduce the risk of harm to zero, only to the
socially optimal level.
15
See, generally, D Dewees, D Duff and M Trebilock, Exploring the Domain of Accident Law:
Taking the Facts Seriously (1996). See also L Liang, F Sloan and E Stout, “Precaution,
Compensation and Threats of Sanctions: The Case of Alcohol Servers” (2004) 24
International Review of Law and Economics 49.
16
These issues are discussed in relation to the impact of regimes for dealing with
environmental pollution based upon negligence and strict liability by A Alberini and D
Austin, “Accidents Waiting to Happen: Liability Policy and Toxic Pollution Releases” (2002)
84 Review of Economics and Statistics 729.

146
 incentive to invest sufficiently in the “harm-reducing” precautions of good
administrative practice. In contrast, those who fear defensive administration see
public bodies over-investing in such harm-reducing precautions.

B.24 There is, however, a difficulty with the defensive administration argument. Why
should rational actors invest in harm-reducing precautions to the extent that
defensive administration results? The law typically requires no more than that a
public body should achieve a reasonable standard of performance for it not to be
held to be negligent. In the context of state liability, where the criteria for
demonstrating that behaviour is unreasonable are demanding, such over-
investment of resources would not seem rational.

B.25 One possible explanation is that, since public bodies do not face the
countervailing pressures of product market competition, there is little to prevent
over-investment in harm-reducing precautions. If increased expenditure on
defensive administration causes cuts in the level or quality of service, individuals
cannot transfer their business to an alternative supplier.

B.26 Yet some public bodies may be exposed to the risk of a negligence claim from
more than one of the parties involved. In such cases, minimising the risk of a
claim from one quarter may increase the risk from another. In this case, the
absence of competition would not in itself significantly reduce a public body’s
incentive to consider the issue of liability.

B.27 Another possible reason for a retreat into defensive administration relates to lack
of information. If the standard of reasonableness or, more generally, the limits of
liability are uncertain then it will not be possible to identify with precision the
appropriate level of investment in harm-reduction measures. This could lead
those who are risk-averse to invest heavily in “good” administrative practice to
maximise their chances of meeting whatever standard will be applied, to the
extent that de facto defensive administration is the result.17

B.28 Attitudes to risk are also relevant to the more fundamental question: precisely
which practices constitute “defensive administration”? The term lacks any widely-
accepted definition. A practice that would be considered “defensive” by a public
official with a high tolerance for risk might be seen as entirely appropriate and
prudent – and not “defensive” in a negative sense – by a second who is risk
averse. In the field of medical negligence there is evidence to suggest that
changing liability or increasing risk of litigation leads to changes in clinical
practice that could be deemed to be “defensive”.18 Yet, others argue that some of

17
This point has been made in relation to “overkill” arguments in judicial reasoning, of which
defensive administration is one example, by P Cane, “Consequences in Judicial
Reasoning” in J Horder (ed), Oxford Essays in Jurisprudence: Fourth Series (2000) 41, p
45, although it is not cast in quite the same terms.
18
D Dewees, D Duff and M Trebilock, Exploring the Domain of Accident Law: Taking the
Facts Seriously (1996) p 417: “Empirical evidence suggests that the civil liability system
has had a significant impact on medical practice, such as increased record keeping,
increased discussion with patients about treatment risks, referrals to other health care
professional, and increased diagnostic testing”. See also J Elmore et al, “Does Litigation
Influence Medical Malpractice?” (2005) 236 Radiology 37.

147
 these same practices are entirely appropriate and hence greater exposure to
litigation has improved practice.19

B.29 In this respect distinguishing risk-reducing from risk-avoiding strategies can be

valuable. If exposure to liability encouraged risk-reducing strategies then that
may well be socially desirable, whereas investment in risk-avoiding strategies
which do not directly benefit the service users is largely redundant.

B.30 An alternative approach would be to ask whether the core law and economics
argument is applicable to the activities of public bodies. This issue has been
directly addressed in US literature, which we consider in the section that follows.

The responsiveness of public bodies to monetary remedies

B.31 As noted above, an underlying premise of much of the debate is that public
bodies, by analogy with private bodies, are responsive to monetary remedies.
This has been forcefully contested in the US literature on constitutional torts.

B.32 Levinson20 argues that the view that monetary remedies will have a significant
impact upon public bodies is misconceived. Public bodies are more responsive to
the political costs and benefits of administrative action than the financial costs,
which can ultimately be passed on to others. Hence, changing the behaviour of
public bodies requires regulatory mechanisms that affect their political, rather
than financial, calculations. He considers that “without a sufficiently complex
model, any predictions about the incentive effects of constitutional cost remedies
on government behaviour are highly suspect”.21

B.33 Rosenthal accepts that government responds primarily to political incentives, but
argues that governmental liability reduces the resources available to politicians to
pursue their favoured political agenda and this in turn affects their chances of re-
election. Hence, monetary liability has a direct connection to political priorities,
which gives politicians an incentive to minimise exposure to tort claims.22

B.34 While the detail of this argument is shaped to some degree by the political
structures of the US, the broad points it raises are important. Administrative
decision-making is typically embedded in a political process, and that this can
inject other priorities into the decision-making calculus.

B.35 The opportunities to study the impact on public bodies of specific changes in the
contours of liability in the UK are rare. Hartshorne and colleagues report on a

19
See for example, A Symon, “Litigation and Changes in Professional Behaviour: a
Qualitative Appraisal” (2000) 16 Midwifery 15.
20
D Levinson, “Making Governments Pay: Markets, Politics and the Allocation of
Constitutional Costs” (2000) 67 University of Chicago Law Review 345.
21
Above, 386 to 387.
22
L Rosenthal, “A Theory of Governmental Damages Liability: Torts, Constitutional Torts,
and Takings” (2006) 9 Journal of Constitutional Law 1, 30. Rosenthal argues that the
widespread implementation of immunity legislation in the US should be taken as an
indicator that liability represents a constraint upon the discretion of public bodies. By
implication, the costs of liability must be perceived by legislators to be greater than the
political costs associated with passing immunity legislation.

148
 study of the impact of Capital and Counties plc v Hampshire County Council23
upon the Fire Service.24 The research demonstrates that there are many
variables that influence the impact of liability. The authors note that:

In Hampshire … the discussion of whether the imposition of liability

may lead to defensive fire fighting rested on the premise that fire
fighters would be aware both of any legal decision imposing liability,
and its full legal implications. The research demonstrates that instead,
this information is taking time to filter through to all ranks, and in
some instances is becoming distorted in the process. Moreover, there
is a suggestion that in some cases information supplied to lower
ranks may be, albeit for what are conceived as good reasons, to a
certain extent diluted. The research even demonstrates that as
regards the highest echelons of an organisation, the supply of legal
information to it may be patchy, and the understanding of it variable.25

Very similar variables have been identified in relation to the impact of judicial
review, discussed below.

B.36 A small US study of the practices of a psychiatric hospital that had been subject
to a lawsuit regarding the negligent release of a dangerous patient found clearer
evidence of deterrence leading to more cautious release.26 Some commonly
theorised negative effects upon front-line workers – particularly stress and
“litigaphobia” – were found to be present, alongside lower morale.

B.37 A key point here is that over-caution on the part of decision-makers regarding the
release of patients may have reduced the scope for negligent release lawsuits,
but it impinged upon the freedom rights of non-released patients. This not only
led to harm to these patients but also opened the possibly of legal challenges
from a different quarter. This is a good illustration of the complexity associated
with decision-making in public sector contexts.

THE IMPACT OF LIABILITY ON PUBLIC BODIES – OTHER MODELS

B.38 Law and economics works with a very specific, and relatively simple, model of
rationality. This in turn has inspired much of the thinking about the way in which
monetary remedies – and tort law in particular – will impact upon bureaucratic
behaviour. It is undoubtedly possible to detect elements of the law and

23
[1997] QB 1004.
24
J Hartshorne, N Smith and R Everton, “Caparo Under Fire: A Study of the Effects upon the
Fire Service of Liability in Negligence” (2000) 63 Modern Law Review 502.
25
Above, pp 518 to 519
26
N Poythress and S Brodsky, “In the Wake of a Negligent Release Lawsuit: An Investigation
of Professional Consequences and Institutional Impact on a State Psychiatric Hospital”
(1992) 16 Law and Human Behavior 155.

149
 economics type of cost-benefit thinking in the response of public bodies to the
liability placed upon them.27

B.39 This is, however, only one way that decision-making can be conceptualised. In
this section we briefly examine four alternative strands in the academic literature
on the decision-making process. Changing our understanding of decision-making
processes can change our appreciation of the likely impact of imposing liability,
and of the value of alternative regulatory mechanisms for delivering effective
public administration.

Behavioural law and economics

B.40 The behavioural economics perspective argues that adopting alternative
assumptions about rationality can deliver a richer understanding of legal
phenomena.28

B.41 Its central propositions are, first, that decision-makers often use rules of thumb
(“heuristics”) rather than full cost-benefit calculation and, second, decision-
making is subject to a range of biases, including egocentrism, over-confidence,
over-optimism, confirmation bias, and the endowment effect.29 Heuristics include
the availability heuristic, which means, for example, that individuals rely upon
recent experience of an event as the basis for assessing its likelihood. The
consequence is over-estimation of the probability of easily recalled or recently
experienced events.

B.42 In terms of the impact of liability, behavioural law and economics could be used
to consider the way in which the availability heuristic affects public bodies’
perceptions of the risks associated with particular courses of action. Over-
confidence bias can, for example, lead to misapprehension of the robustness of
procedures and success in judicial review.30 These are analytical tools that have
yet to be systematically applied in the field of administrative justice, at least in the
UK.

27
The way in which some German local authorities respond to changing requirements
regarding highway maintenance would appear to be an example. Rather than incur the
costs of additional maintenance it is cheaper to pay out the occasional claim for damages.
See B Markesinis and J Fedtke, “Damages for the Negligence of Statutory Bodies: The
Empirical and Comparative Dimension to an Unending Debate” [2007] Public Law 299.
28
See, for example, C Jolls, C Sunstein and R Thaler, “A Behavioural Approach to Law and
Economics” (1998) 50 Stanford Law Review 1471; L Babcock and G Pogarsky, “Damage
Caps and Settlement: A Behavioural Approach” (1999) 28 Journal of Legal Studies 341.
This alternative model of decision-making has itself been challenged on the basis that it
overstates the prevalence of departures from rationality: G Mitchell, “Why Law and
Economics’ Perfect Rationality Should Not be Traded for Behavioral Law and Economics’
Equal Incompetence” (2002) 19 Georgetown Law Journal 67.
29
The endowment effect refers to a situation in which the price at which an individual is
willing to sell something that they own exceeds the price at which they would be willing to
buy an identical item from someone else.
30
This would appear to be the case in the local authorities studied by Halliday. See S
Halliday, “The Influence of Judicial Review on Bureaucratic Decision-Making” [2000] Public
Law 110.

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 Decision research
B.43 Herbert Simon’s concept of bounded rationality is a well-established alternative to
rationality as understood by mainstream economics.31 From this perspective
decision-makers have aspirations with respect to the quality of an outcome: they
are searching for a solution that is acceptable or “good enough”. Decision-makers
will therefore search for a solution that reaches their aspiration level and then
stop.

B.44 Unlike mainstream economics, there is no assumption that the solution chosen
will be optimal. The key issues then become how aspiration levels are set and
what constitutes a “good enough” decision. Public law requirements may provide
guidance as to what is “good enough”, although they may be too open textured to
provide certainty.32

B.45 A further level of complexity in understanding decision making arises when one
considers that in many organisations’ decisions are made by groups of people. A
whole literature exists on the effects that group dynamics can have on decision-
making, including the effects of conflict and of “groupthink” – the tendency of
insular groups to come to a quick and unreflective consensus.33 For our
purposes, it is enough to note that this learning reinforces the message that
decision-making in organisations is not well captured by the classic law and
economics rationality assumptions.34

Socio-legal approaches
B.46 Halliday draws on research in local housing authorities to offer an analysis of the
nature of administrative decision-making framed in more sociological terms.35 He
proposes that an important element in understanding the impact of judicial review
upon administrative decision-making is the nature of the decision-maker. In
particular, he highlights their level of legal knowledge; their legal
conscientiousness; and their legal competence.

B.47 Low levels of legal knowledge within an organisation will reduce the likelihood
that administrative practice will accord with the law, or that changes in the law will
be adequately reflected in changes in practice. If decision-makers are legally
conscientious then they will seek to comply with the law, whereas low levels of
31
H A Simon, Models of Bounded Rationality (1982).
32
See K Pick and M Sunkin, “The Changing Impact of Judicial Review: The Independent
Review Service of the Social Fund” [2001] Public Law 754.
33
I L Janis, Victims of Groupthink (1972). See also, among others, T Postmes, R Spears,
and S Cihangir, “Quality of Decision-Making and Group Norms” (2001) 80 Journal of
Personality and Social Psychology 918; V D Wall, G J Galanes and S B Love, “Small,
Task-Oriented Groups: Conflict, Conflict Management, Satisfaction and Decision Quality”
(1987) 18 Small Group Research 31; D J Devine, “Effects of Cognitive Ability, Task
Knowledge, Information Sharing, and Conflict Decision-Making Effectiveness” (1999) 30
Small Group Research 608; S Schulz-Hardt et al, “Group Decision-Making in Hidden
Profile Situations: Dissent as a Facilitator for Decision Quality” (2006) 91 Journal of
Personality and Social Psychology 1080.
34
See, for example, R Prentice, “Chicago Man, K-T Man, and the Future of Behavioral Law
and Economics” (2003) 56 Vanderbilt Law Review 1664.

151
 legal conscientiousness will result either in creative compliance or failure to
comply. Finally, legal competence refers to the ability to appreciate the
significance and implications of judicial pronouncements.

B.48 An example of the effect of low levels of legal competence is provided by the
work by Hartshorne and colleagues on the fire service referred to above. From
their survey responses, it appears that in some areas the Hampshire judgment
had been interpreted as being about sprinkler systems (and so requiring a
change of policy in relation to them), reflecting the facts of the case, rather than
having broader implications for the liability of fire authorities in negligence.36

Policy-oriented approaches
B.49 Underlying Halliday’s framework, as with much socio-legal work in this field, is the
concept of “street-level bureaucracy”, which has had an equally significant impact
upon the literature on the policy process.37 Street-level bureaucrats are those
“who interact directly with citizens in the course of their jobs, and who have
substantial discretion in the execution of their work”.38 Much of the literature has
focused upon front-line police, social and welfare, and educational services.

B.50 Street-level bureaucrats are seen as using their discretion to develop coping
strategies to manage work overload that results from effectively unlimited
demands upon limited resources. Strategies can take various forms, such as
strict adherence to rules when the exercise of discretion would be expected in
order to process cases quickly.39 Some such coping strategies are precisely the
type of procedural wrongs that administrative law is designed to address. If such
strategies become embedded in the standard operating procedures of an
organisation or engrained in an organisation’s culture, the incentives needed to
deter inappropriate practice may need to be correspondingly stronger.40 The
difficulties in effecting permanent changes to organisational practices should not
be underestimated.41

35
S Halliday, Judicial Review and Compliance with Administrative Law (2004). This account
resonates with many of the insights derived from the approaches we have already
considered, but grounds the analysis in issues of more direct concern to this project.
36
J Hartshorne, N Smith and R Everton, “Caparo Under Fire: A Study of the Effects upon the
Fire Service of Liability in Negligence” (2000) 63 Modern Law Review 502.
37
M Lipsky, Street-level Bureaucracy: Dilemmas of the Individual in Public Service (1980).
38
Above, p 3.
39
For illustrative examples, see I Loveland, “Housing Benefit: Administrative Law and
Administrative Practice” (1988) 66 Public Administration 57.
40
This point is also made in a slightly different context by B C Canon, “Studying Bureaucratic
Implementation of Judicial Policies in the United States: Conceptual and Methodological
Approaches” in M Hertogh and S Halliday (eds) Judicial Review and Bureaucratic Impact:
International and Interdisciplinary Perspectives (2004) 76.
41
See, for example, K M Sutcliffe and G McNamara, “Controlling Decision-Making Practice in
Organisations” (2001) 12 Organisation Science 484.

152
B.51 Although it may be possible to frame rules and procedures that reduce the scope
for front-line workers to exercise their discretion,42 it is not possible to eradicate
discretion: Maynard-Moody and Musheno note that “like putty, discretion can be
squeezed by oversight and rules but never eliminated; it will shift and re-emerge
in some other form in some other place”. In this respect, street-level work can be
seen as “rule saturated but not rule bound”.43

B.52 Conceiving of service delivery in terms of the activities of street-level bureaucrats

makes it possible that legal concerns and requirements could receive less weight
than other imperatives. Under what conditions will a system offer significant
scope for the exercise of front-line discretion and when will discretion be
minimal? Equally importantly, under what conditions will legal concerns receive
less weight than other imperatives? These are issues that we consider below.

Decision-making in public bodies – conclusion

B.53 In this section we have touched upon a broad spectrum of arguments. The aim is
to highlight the fact that once one moves beyond the models of rationality
associated with the law and economics approach it becomes clear that a wide
range of factors, operating at the level of the individual and the organisation, act
to make the picture much more complex. In addition, there are topics - such as
the partial ways in which organisations gather information from their environment
or the unavoidable imperfections in intra-organisational communication, - which
we have not addressed but which would add further layers of complexity to the
picture.

B.54 Much regarding the nature of decision-making is still to be debated. In some

instances competing accounts, rather than clear conclusions, emerge. This in
itself means that simple assertions about the way decision-makers will account
for the risk of legal challenge and monetary penalties in their deliberations should
be treated with caution. The forces weighing against giving priority to the
requirements of legal norms can be substantial. We return to this topic below.

JUDICIAL DECISIONS AND PUBLIC BODIES

B.55 There is a substantial body of research on the impact of judicial review on public
bodies, which can provide indirect evidence in building our understanding of the
likely impact of changing liability. We begin however by considering the largely
American political science literature on the impact of judicial decisions more
widely.44

42
The experiences of the teachers and employment agency workers who participated in the
small US qualitative study are compared in M Kelly, “Theories of Justice and Street-level
Discretion” (1994) 4 Journal of Public Administration Research and Theory 119.
43
S Maynard-Moody and M Musheno, “State Agent or Citizen Agent: Two Narratives of
Discretion” (2000) 10 Journal of Public Administration Research and Theory 329, 334 and
339.
44
The US literature on judicial impact is reviewed by B C Canon, “Studying Bureaucratic
Implementation of Judicial Policies in the United States: Conceptual and Methodological
Approaches” in M Hertogh and S Halliday (eds) Judicial Review and Bureaucratic Impact:
International and Interdisciplinary Perspectives (2004) 76, drawing in part upon B C Canon
and C A Johnson, Judicial Policies: Implementation and Impact (2nd ed 1999).

153
 Impact of judicial rulings upon public bodies
B.56 O’Leary conducted a systematic study of the impact of judicial activities upon the
US Environmental Protection Agency.45 The research found that court rulings
tended to dictate priorities within the Agency, sometimes at the expense of
implementing statutory requirements, as the agency chose between competing
priorities. As court rulings were made, work was reprogrammed and funds and
personnel redeployed.

B.57 Other impacts included greater difficulty in planning because discretion over
programmes of work was undermined. Some judgments handed down were
vague or broad ranging. The relative power of legal staff within the organisation
increased, while the power of scientific staff was eroded. Some departments
within the Agency perceived positive effects such as resources being devoted to
favoured projects or through increasing staff motivation as they pulled together to
meet the judicial agenda. O’Leary concluded that the impact of judicial rulings
upon the Agency was neither entirely positive nor negative.

B.58 Johnson examines five public bodies affected by five judicial rulings in
Pennsylvania.46 He starts from the position that agencies react to judicial
decisions in a series of related stages that either use or risk resources. The
interpretation of the judgment and the decision about how extensively to search
for alternative responses are important in shaping an agency’s response. Two
agencies made only a limited interpretation of the court rulings and, as a result,
took the view that the ruling did not carry implications for their subsequent
practice. Johnson then found that when taking decisions regarding how to
respond, agencies tended to weigh up perceived risks of enforcement against the
costs and possibilities of change. This suggests a relatively rational approach to
determining agency response in the law and economics sense. Generally the
agencies examined sought to minimise the extent of their response.

B.59 A similar stages-based model for understanding agency responses to judicial

rulings in the US is presented by Canon.47 Canon argues that an agency’s
“behavioural adjustment” needs to be understood in the light of an agency’s prior
“acceptance decision”: the agency welcomes the judicial ruling as supporting its
mission; treats it as being of little importance; or takes the view that the ruling will
make it more difficult for the agency to fulfil its goals, that it conflicts with core
agency values, or that it reflects what the agency considers to be the wrong
policy. Hence, the acceptance decision can be positive, indifferent or negative.

B.60 The extent to which an agency’s behaviour changes in the light of a judicial ruling
will not correlate directly with the nature of its acceptance decision. For example,
external pressures may mean that even though its acceptance decision is
45
R O’Leary, “The Impact of Federal Court Decisions on the Policies and Administration of
the US Environmental Protection Agency” (1989) 41 Administrative Law Review 549.
46
C Johnson, “Judicial Decisions and Organisational Change: Some Theoretical and
Empirical Notes on State Court Decisions and State Administrative Agencies” (1979) 14
Law and Society Review 27.

154
 negative the agency nonetheless perceives it necessary to make a substantial
behavioural adjustment. Yet behavioural adjustment is mediated by the
acceptance decision: an indifferent or negative acceptance decision will tend to
attenuate an agency’s response to judicial rulings, other things being equal.

B.61 Canon notes that the nature of agency responses to new legal requirements
need not reflect a simple dichotomy of compliance or non-compliance. There is a
continuum representing more or less compliant policy responses.48

The impact of judicial review

B.62 While judicial review has the potential to promote components of administrative
justice such as the reasonableness of decisions and sufficient investigation of
facts, it is not well suited to fostering good administration more broadly:

A wider concept of good administration might, for instance, include

values such as effectiveness and efficiency in implementing public
programmes and delivering public services. The grounds of judicial
review do not promote these values as such and may, indeed, conflict
with them. For instance, observing the requirements of procedural
fairness and respect for human rights may reduce the ability of public
functionaries to achieve their policy objectives quickly, cheaply and
comprehensively.49

B.63 Assessing the impact of judicial review is complex.50 The mechanisms by which
judicial review can impact upon administrative behaviour are several:51

(1) The process of being subject to judicial review, including threats of

litigation that proceed no further, may lead to alteration in the behaviour
of the public body concerned.

(2) The judgments emerging from judicial review can impact not only upon
the public body being reviewed but other bodies engaged in similar
activities or using similar organisational processes.

47
B C Canon, “Studying Bureaucratic Implementation of Judicial Policies in the United
States: Conceptual and Methodological Approaches” in M Hertogh and S Halliday (eds)
Judicial Review and Bureaucratic Impact: International and Interdisciplinary Perspectives
(2004). It draws upon Johnson’s work. See also C A Johnson, “Judicial Decisions and
Organisational Change” (1979) 11 Administration and Society 27.
48
Similarly it has been argued that evaluating the impact of judicial decisions should not be
limited to the question of compliance or the ultimate result of court decisions, but should
involve an analysis of how officials respond to the decision and the process of
implementation. See M Hertogh, “Coercial, Cooperation, and Control: Understanding the
Policy Impact of of Administrative Courts and the Ombudsman in the Netherlands” (2001)
Law and Policy 47.
49
P Cane, Administrative Law (4th ed 2004).
50
See G Richardson, “Impact Studies in the United Kingdom” in M Hertogh and S Halliday
(eds) Judicial Review and Bureaucratic Impact: International and Interdisciplinary
Perspectives (2004) 103.
51
M Sunkin, “Conceptual Issues in Researching the Impact of Judicial Review on
Government Bureaucracies” in M Hertogh and S Halliday (eds) Judicial Review and
Bureaucratic Impact: International and Interdisciplinary Perspectives (2004) 43.

155
 (3) Judicial review can promote a particular set of legal norms, values and
principles. If the thinking of public bodies is influenced by these values
then judicial review may have a more indirect and diffuse impact upon
administrative behaviour through shaping the broad culture.

B.64 The first two mechanisms are broadly instrumental, working by means of
deterrence, the third mechanism could be thought of as a non-instrumental
means of shaping behaviour. It can be argued that a counterpart to each of these
mechanisms exists in relation to monetary remedies.

B.65 The third indirect mechanism indicates the complexity of the task of assessing
the full range of potential impacts of judicial review. This is reinforced by
reference to the question of who is influenced by the judicial process and how.
Sossin argues that the principal means by which judicial requirements are
communicated to front-line decision-makers is “soft law” such as non-legislative
guidance or internal rules and administrative policies.52 The behaviour of front-
line decision-makers may therefore be strongly influenced by judicial review but
this influence may be heavily obscured.

B.66 Some conclusions can nevertheless be drawn. Perhaps the clearest is that
judicial review appears to have limited ability to influence administrative
behaviour. Evidence indicates that impact is limited in both administrative
bureaucracies and adjudicatory bodies.53 A study of the impact of judicial review
on Mental Health Review Tribunals found it to be “patchy at best, even with
regard to procedural fairness”.54 In contrast, other empirical evidence suggests
that judicial review can have a discernible impact upon bureaucratic outcomes to
the benefit of the service-user rather more frequently.55

B.67 A second conclusion is that the influence of judicial review can vary over time.
Initial exposure to review can have a significant impact upon an organisation, but
repeated exposure can lead to a less conscientious approach: the risk of judicial
review comes to be seen as integral to the environment. Newly established
organisations can be more inclined to alter their practice in response to an
adverse judicial review decision. This inclination can lessen over time. Pick and

52
L Sossin, “The Politics of Soft Law: How Judicial Decisions Influence Bureaucratic
Discretion in Canada” in M Hertogh and S Halliday (eds) Judicial Review and Bureaucratic
Impact: International and Interdisciplinary Perspectives (2004) 129.
53
See for example, S Halliday, Judicial Review and Compliance with Administrative Law
(2004); G Richardson and D Machin, “Judicial Review and Tribunal Decision-Making: A
Study of the Mental Health Review Tribunal” [2000] Public Law 494; T Buck “Judicial
Review and the Discretionary Social Fund: The Impact on a Respondent Organisation” in T
Buck (ed) Judicial Review and Social Welfare (1998) 115; K Pick and M Sunkin, “The
Changing Impact of Judicial Review: The Independent Review Service of the Social Fund”
[2001] Public Law 736; I Loveland, Housing Homeless Persons (1995). This assessment
can be contrasted with some of the views reported in A Barker, “The Impact of Judicial
Review: Perspectives from Whitehall and the Courts” [1996] Public Law 612.
54
G Richardson and D Machin, “Judicial Review and Tribunal Decision-Making: A Study of
the Mental Health Review Tribunal” [2000] Public Law 494, 514.
55
See R Creyke and J McMillan, “The Operation of Judicial Review in Australia” in M
Hertogh and S Halliday (eds) Judicial Review and Bureaucratic Impact: International and
Interdisciplinary Perspectives (2004). For a US case study see M R Mandlawitz, “The
Impact of the Legal System on Educational Programming for Young Children with Autistic
Spectrum Disorder” (2002) 32 Journal of Autism and Developmental Disorders 495.

156
 Sunkin highlight the importance of senior management in shaping the “reverence”
accorded to judicial review: a change of Social Fund Commissioner led to a
substantial change in emphasis at senior management level and then throughout
the organisation. This resulted in a shift from a focus on legal process and
“judicial review proofing” decisions, to a focus on communication that is
intelligible to consumers.56

B.68 Third, it has been suggested that public bodies can effectively use the existence
of judicial review as an opportunity to delegate scrutiny of their processes. Rather
than attend routinely to the question of whether their processes adhere to the
requirements of administrative justice they rely upon the courts to highlight when
they have fallen short.

B.69 Fourth, a level of defensive practice designed primarily to protect the organisation
from legal challenge has certainly been detected.57

B.70 One of the strongest messages to emerge from this literature is that the impact of
judicial review upon administrative decision-making needs to be set alongside a
range of other influences. As Halliday argues, drawing on his three local authority
case studies:

How judicial review “impacted” on the bureaucratic justice of …

decision-making processes depended … upon the non-legal
influences and priorities which co-existed with concerns of legality. In
different ways, professional intuition, systemic suspicion, bureaucratic
expediency, judgements about the moral desert of applicants, inter-
officer relations, financial constraints and other values and pressures
all played a part in how judicial review impacted upon decision-
making.58

What determines what impact judicial review will have?

B.71 Halliday has offered the most comprehensive framework for contextualising the
impact of judicial review.59 We noted above that this framework identifies legal
knowledge, legal conscientiousness and legal competence as key characteristics
of the decision-maker that shape the impact of judicial review. These factors
carry over to other types of regulatory mechanism. His recent study of the impact
of internal reviews on decision-making within two Homeless Persons Units found
that internal reviews had greater influence in the circumstances predicted by his
qualitative model: administrative law would appear to play a more influential role
when legal consciousness, legal conscientiousness and legal competence are
higher. The research also noted that differences in the internal structure of the
organisations could make a difference to the extent to which decision-making

56
K Pick and M Sunkin, “The Changing Impact of Judicial Review: the Independent Review
Service of the Social Fund” [2001] Public Law 736.
57
On these points see S Halliday, Judicial Review and Compliance with Administrative Law
(2004).
58
S Halliday, “The Influence of Judicial Review on Bureaucratic Decision-Making” [2000]
Public Law 110, 116. See also M Sunkin and K Pick, “The Changing Impact of Judicial
Review” [2001] Public Law 736.
59
S Halliday, Judicial Review and Compliance with Administrative Law (2004).

157
 was informed by an up-to-date interpretation of the law. This was more apparent
in the organisation with a dedicated review officer than in the other organisation.60

B.72 In addition, Halliday argues that judicial review is likely to be more effective in
regulating administrative behaviour when, first, the law is clear and consistent so
there is little doubt regarding what it requires and, second, a public body operates
in a context where law has a strong presence or it does not face a high level of
competition from other normative frameworks.

B.73 The following have been identified as the competing normative frameworks that
can bear upon public administrations: bureaucratic, professional, legal,
managerial, consumerist and market models.61 The first three have been in
competition as the dominant principle underpinning administration for many
years. The latter three models – managerial, consumerist and market – have
emerged as key concerns for the public sector since the reforms associated with
the new public management agenda took hold in the 1980s.

B.74 The normative orientation of a body will be the outcome of competition between
normative positions which, in turn, will be championed by different interests, with
different bargaining strength. It should be anticipated that:

These trade-offs vary between organisations and, within a given

organisation, between the different policies delivered by that
organisation and between the different stages of policy
implementation. They also vary over time and between countries.62

B.75 While not all of these six models are relevant to all public bodies, the legal model
will exist unopposed in few fields.63 When other models come to dominate, legal
concerns may be sacrificed in order to satisfy other imperatives. The
contemporary emphasis upon managerialism, for example, with the publication of
targets and the naming and shaming of those who fail to reach an acceptable
standard of performance means that public officials can be more concerned with
delivering satisfactory performance, even at greater risk of legal challenge.64

60
D Cowan, S Halliday and C Hunter, “Adjudicating the Implementation of Homelessness
Law: The Promise of Socio-Legal Studies” (2006) 21 Housing Studies 381.
61
Halliday draws on the framework proposed by Adler: M Adler, “A Socio-Legal Approach to
Administrative Justice” (2003) 25 Law and Policy 323, who is in turn elaborating on the
work of Mashaw: J Mashaw, Bureaucratic Justice: Managing Social Security Disability
Claims (1983).
62
M Adler, “A Socio-Legal Approach to Administrative Justice” (2003) 25 Law and Policy
323, 331.
63
Richardson and Machin, for example, note the tensions between professional – in this
case, medical – and legal norms in relation to tribunal decision-making. See G Richardson
and D Machin, “Judicial Review and Tribunal Decision-making: A Study of the Mental
Health Review Tribunal” [2000] Public Law 494.
64
The distorting effects of targets have recently been explored in the context of the health
service by G Bevand and C Hood, “What’s Measured is What Matters: Targets and
Gaming in the English Public Health Care System” (2006) 84 Public Administration 517.
For a more general discussion see C Propper and D Wilson, “The Use and Usefulness of
Performance Measures in the Public Sector” (2003) 19 Oxford Review of Economic Policy
250.

158
B.76 Many public bodies operate in an increasingly crowded normative landscape.
Emphasis upon managerialism, consumerism and the market, alongside
traditional professional and bureaucratic concerns, could lead to the view that
bureaucratic and professional discretion have largely been curtailed. This might
suggest that as long as policies and procedures are robust the scope for
infringing administrative law has been reduced. However, while front-line
discretion may be more tightly constrained, to suggest that it has been removed
entirely would be mistaken.65

B.77 The framework proposed by Halliday offers a powerful tool for thinking about the
role of law in public administration. If we unpack aspects of these models further,
it is possible to highlight additional dimensions to the issue. For example, the
pursuit of efficiency gains, under the managerial model, can lead to changes in
the workforce’s terms and conditions of employment. Employment conditions
have been identified as a factor in the quality of decision-making: the greater the
insecurity and casualisation, the poorer the quality of decision-making.66

THE RELEVANCE OF INDIRECT EVIDENCE

B.78 It is important to be conscious of the limits on the scope for learning from
evidence relating to alternative mechanisms such as judicial review. The impact
of judicial review, for example, may be moderated by the fact that in some cases
the public body might lawfully be able to take the same decision again. Hence, a
successful judicial review may not materially affect the public body’s ability to
achieve its desired administrative outcome. The effect of this should not be
exaggerated, however. In practice it will often be the case that the nature of the
judgment effectively determines the decision that the public body must take.

B.79 Nevertheless, it may be that the award of damages will impinge upon budgets67
and will send a more concrete message that there had been a wrong that needs
remedying. In this respect it may elicit a stronger response from public bodies.
Even here, however, the incentives can be attenuated as when, because of the
division of labour within an organisation, budgets are the responsibility of a
separate department.68 Of course, very often the terms of the judgment will in
practice constrain the public body to take a particular decision, or a decision
within a much narrower range of possibilities than the public body thought were
open to it before the judicial review. Nevertheless, the mechanisms through
which judicial review, on the one hand, and monetary remedies, on the other,
impact upon the behaviour of public bodies are different, and so may present
public bodies with different incentives.

B.80 Where judicial rulings either substitute the court’s decision for that of the public
body, as in appeals, or present the public body with what is taken to be a

65
This argument is developed further by T Evans and J Harris, “Street-level Bureaucracy,
Social Work and the (Exaggerated) Death of Discretion” (2004) 34 British Journal of Social
Work 871.
66
Q Alam, M Robinson and J Pacher, “Public Sector Reform: Employment Security and
Quality of Decision-Making in the Australian Taxation Office” (2006) 29 International
Journal of Public Administration 743.
67
Either directly or through increased premiums for liability insurance.
68
See S Halliday, Judicial Review and Compliance with Administrative Law (2004).

159
 mandate to act in a way other than it would have chosen, the contrary may be
true – the response of the public body might be stronger than if the message
arrived in monetary terms.

OUR PROVISIONAL CONCLUSIONS

B.81 As we observed at the outset, there are three possible ways in which a change in
liability could impact on public bodies. Public bodies’ behaviour might not change
at all in reaction to changes in liability. Or their behaviour might change
appropriately – the imposition of liability might deter negligent behaviour or
decision-making, resulting in better public services. Or they might over-react, and
inappropriately distort their behaviour to avoid liability, harming the service they
provide to the public. Case law frequently contains broad assertions that one or
other of these effects is likely.

B.82 The broad conclusion we come to is that which of these outcomes comes about
is heavily context-, indeed organisation specific. It is possible to offer hypotheses
regarding the circumstances in which legal concerns will be relatively marginal –
low levels of legal knowledge, legal competence and legal conscientiousness; an
environment in which other (policy) priorities dominate; a field of law that is
relatively vague in its prescriptions and implications – but empirical evidence
does not as yet allow us to state with confidence how these circumstances are
distributed within and between policy sectors.

B.83 It is therefore simply not possible to make an accurate general statement as to

the likely outcome of any given change in liability on a range of public bodies. We
think it can be reasonably concluded that the likelihood that changes to liability
will not result in changes to behaviour is probably higher than has tended to be
supposed. But beyond that, we would hold any general statement as open to
doubt. Having said that, it would be reasonable to observe that, where a change
in behaviour has been detected, it is probably more likely to be seen as
promoting defensive rather than effective administration.

B.84 To the extent that studies of judicial review can be relied on as an indication of
the effect of liability, we find evidence of all three possible outcomes, depending
on largely contingent factual differences between organisations and policy areas.
Above all, one of the strongest messages from this now reasonably well studied
area is that the impact of judicial review on administrative decision-making needs
to be set in the context of a range of other influences. Much will depend on non-
legal influences and the autonomous priorities and concerns of the organisation
and those who staff it.69 Academics have identified alternative normative
frameworks which may compete with legal norms in determining the behaviour of
public bodies (such as professional, bureaucratic or managerial models). On the
face of it, these approaches seem to us to offer the possibility of understanding
when and why law in general, and liability in particular, has an impact upon
practice. They might provide a route to predicting, in any particular organisation

69
Recent work on a broader range of contextual variables, such as the socio-demographic
characteristics of local populations, has further advanced our understanding of when and
where public law will impact upon public bodies: M Sunkin, K Calvo, L Platt and T
Landman, “Mapping the use of judicial review to challenge local authorities in England and
Wales” (2007) Public Law 545.

160
 under study, how it might react to changes in liability. But again, they do not help
with useful predictive generalisations.

B.85 That is not the end of the matter, however. Some important work has suggested
(albeit in the context of judicial review) that the legal equipment of an organisation
can influence the appropriateness or otherwise of its reaction to legal change or
challenge. Halliday’s work identifies legal knowledge, legal conscientiousness
and legal competence as necessary to ensure an organisation conforms to public
law norms.

Public bodies as agents

B.86 The research, as appropriate, treats public bodies as passive. It often only hints
at the processes by which legal concerns come to play a relatively minor role in
the practice of many organisations. Yet, from a law reform perspective, we
consider that it is appropriate to see public bodies as possessed of some powers
of agency. It is important not to lose sight of the fact there is a degree of
discretion, albeit in many cases heavily constrained, over the priority that
organisations give to legal concerns.

B.87 There are two particular consequences of this. In particular, if Halliday’s work
accurately reflects the variables that determine the quality of public bodies’
responses to liability, then they have at least some power to determine the
appropriateness of their response. If public bodies ensure that they have the right
mechanisms to deliver legal knowledge, conscientiousness and competence,
then they will be more likely to react appropriately to the messages sent by
liability. This is a relevant factor in considering the extent to which the potential
for adverse behaviour by public bodies should be a consideration in determining
the design of the remedies which should be available to the wronged citizen.
Ultimately, a claim by public bodies that they will indulge in inappropriate
defensive administration if compensation becomes more readily available is to be
treated with some caution, because it is within their power to order their affairs so
as to ensure that such changes in their behaviour that take place are beneficial.

B.88 Secondly, it is important to recognise that public bodies should be capable of

calibrating their reaction to liability by consciously considering what changes in
behaviour would be appropriate and what would not. As we observe above, there
is no objective yardstick by which to measure whether certain practices should be
seen as effective administration or defensive administration. It is, or should be,
for the public bodies concerned to set their own administrative or service-delivery
standards, so as to inform the appropriateness of their reaction to liability.

CONSULTATION
B.89 We would particularly welcome specific information from public bodies on
what they perceive to be either deleterious or beneficial effects of changes
in exposure to compensation, whether legislative or as a result of case law.
We accept that it is not likely that respondents will have formal studies at
their disposal (although of course, if they did we would be very interested).
But anecdotal accounts of what are perceived to be examples of impact
would nonetheless be useful to us.

161
 APPENDIX C
JUDICIAL REVIEW CASE RESEARCH

1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result

1. Aweys and Others v Background: Review of the Yes Yes Yes

Birmingham City local authority’s approach to
Council [2007] the allocation of housing for (1) The Housing Act - In each of the cases, the local authority had
EWHC 52 (Admin) the homeless. 1996 confers a failed lawfully to deal with the claimants
benefit on under Part VII of the Housing Act 1996.
Grounds: individuals such as
the claimants. - In particular, the local authority had breached
(1) The decisions of the local its clear duty under section 193 by failing to
authority with respect to (2) The loss they provide the claimants as homeless persons

162
the claimants were
unlawful; its policy was
irrational;
(2) The decisions and policy
breached Art 8 ECHR.
Result: Allowed.
would claim is of a
similar nature to the
benefit that the
legislation confers
(provision of
accommodation).
with suitable accommodation. The local
authority considered that the claimants’
current accommodation would suffice
temporarily until alternatives were found.
This represented a serious misunderstanding
of the statute and a frustration of its purpose,
since the claimants were homeless under the
Act precisely because their current
accommodation was unsuitable.

- The local authority had in some cases also

1
* Denotes cases where the claimant could obtain damages under the present law.
2
For example: Illegality, irrationality, procedural impropriety, claim under the Human Rights Act 1998, EU law.
3
For example: quashing order, prohibiting order, mandatory order, injunctions, declaration, damages.
4
Factors taken into account in assessing serious fault including: clarity of statutory regime; degree of discretion; complexity of task; whether there was an
intentional breach.
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
failed to process the claimant’s applications
according to the clear statutory provisions.
This had the effect of denying that the
claimants were homeless.
- The local authority’s allocation policy was
unlawful because it failed to give priority to
those to whom the full section 193 duty was
owed (such as the claimants).
- The consequences of these failures were
particularly serious given the state of the
claimants’ current accommodation and the
their difficult circumstances. Four claimants
had large families (of six and seven children)
and three were in overcrowded conditions (in

163
one case two adults and seven children in a
two bedroom flat). Another claimant’s
accommodation had a rat infestation and
was damp. Another claimant had a severely
disabled daughter.

- Further, the local authority was in continuing

breach of the section 193 duty. Most
claimants had been awaiting accommodation
for a considerable time (in one case for three
years and typically for one or two years).

2. Cook v General Background: Challenge of the Yes Borderline No

Commissioners of Commissioners’ decision to
Income Tax and extend the time in which an (1) The Taxes Yes The decision on
Another [2007] appeal could be lodged. Management Act whether to
EWHC 167 (Admin) 1970 confers a - The error of law was a serious one. The law extend the time
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
Grounds:
(1) The decision was unlawful;
(2) Alternatively, the pursuit
by Revenue of bankruptcy
proceedings was in bad
faith and/or breach of
human rights.
Remedies sought:
(1) Quashing order and
substitutionary remedy
164
(that is, court ought to
substitute its own finding
for that of Commissioners)
with respect to the
decision;
(2) Quashing order with
respect to the bankruptcy
proceedings.
Result: Allowed. Quashing
order granted in respect of the
decision not to allow extension
of time.
4
Conferral of benefit Serious fault Causation
benefit on was clear on the matter: there was a limit for lodging
individuals such as previous case on the point. The an appeal was
the claimant. Commissioners in the instant case failed to remitted to the
take any relevant factors into consideration – Commissioners.
(2) The claimant’s it was not a question of whether the Therefore it
Commissioners correctly weighed relevant cannot be said
arguable financial
factors. The interpretation was based on the at this stage
loss in the period
Revenue’s submissions, as the claimant did whether their
after the refusal to
extend time not appear and was not represented. original refusal
(resulting from the caused the
bankruptcy - The fact that their clerk misled them as to the claimant’s
proceedings) is of a legal position is irrelevant, since the arguable loss.
similar nature to the Commissioners are accountable for their own
benefit that the decisions.
legislation confers.
- If the Commissioners had considered
relevant factors, they would have realised
that the lack of an appeal would primarily
prejudice the claimant: justice requires that
he be given an opportunity to put his case,
especially given that his appeal is arguable.
- The consequences are serious for the
claimant, as there is a substantial sum at
stake.
No
- The error of law was excusable, since there
is nothing explicit in the statute in relation to
the discretion of the Commissioners. The
Commissioners decided the question that
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
165
3. R (S) v Secretary of Background: Review of the
State for the Home decision to remove the
Department [2007] claimant to Afghanistan. The
EWHC 51 (Admin) adjudicator dismissed his
appeal, and an application for
discretionary leave to remain
was refused.
Grounds:
(1) There was a breach of his
legitimate expectation that
his application would be
dealt with within a
4
Conferral of benefit Serious fault Causation
they were lawfully to decide. The fact that the
claimant was not represented was not the
fault of the Revenue.
- The Commissioners were misled as to the
legal position by their clerk, and they made
the decision in good faith.
- Even if the Commissioners had considered
additional factors in exercising their
discretion, they would also have had to
consider that there would be prejudice to the
Revenue if the appeal were allowed to
proceed: given the passage of time and the
loss of documentation, it would be difficult to
assess the validity of the grounds of the
appeal.
Yes Yes Yes
(1) The Immigration - The Secretary of State’s letter refusing the
Rules confer a claimant’s asylum claim stated that the
benefit on claimant could gain entry clearance to the
individuals such as UK upon return to Afghanistan. This was
the claimant. incorrect, and could have resulted in serious
consequences for the claimant if he had
(2) The loss he acted on that advice.
claims resulting from
the failure of the - The Secretary of State was also wrong to
Secretary of State to certify that the claimant had no right to
lawfully process his appeal a decision to refuse Discretionary
asylum claim, and Leave to Remain.
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
reasonable time. A long
delay deprived him of his
entitlement for Indefinite
Leave to Remain: this was
unfair and an abuse of
process;
(2) It was disproportionate
and therefore unlawful to
remove him because it
would breach Art 8 ECHR;
(3) The decision to certify that
no right of appeal lay from
the decision to refuse
4
Conferral of benefit Serious fault Causation
his detention, is of a
- There was an excessive delay of 54 months
similar nature to the
in dealing with the claim, which resulted in
benefit that the
unfairness and distress to the claimant. The
legislation confers.
claimant was a refugee when he arrived in
the UK and was in “genuine need”. He would
have been granted Indefinite Leave to
Remain if the claim had been dealt with
earlier.
- The two errors made by the Secretary of
State and the delay have a cumulative effect.
- Important interests of the claimant are at
stake, since he stands to gain Indefinite
Leave to Remain.

166
Discretionary Leave to
Remain was clearly
- It is likely that there was only one lawful
unlawful.
decision open to the Secretary of State in
relation to the asylum claim.
Result: Allowed. The removal
directions and certification
were quashed. The claim was
remitted back to Secretary of
State for reconsideration.

4. Donkin v The Law Background: The claimant Yes Yes No

Society [2007] appealed against the decision
EWHC 414 (Admin) of the Solicitor’s Disciplinary
Tribunal which found that the
he had acted dishonestly and
ordered him to be struck off
the Roll of Solicitors.
(1) The Solicitors - The Tribunal imputed an objective element There was no
Act 1974 confers a into the subjective limb of the dishonesty causation: the
benefit on test. This constituted a serious error of law. claimant cannot
individuals such as Counsel representing the claimant set out prove that but
the claimant (the the test clearly, and the Tribunal apparently for the illegality
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
Grounds:
(1) Error of law
(misapplication of the
dishonesty test);
(2) Failure by the Tribunal to
take account of evidence
of the claimant’s good
character (a relevant
consideration).
Remedy sought: Quashing
order.
4
Conferral of benefit Serious fault Causation
claimant is subject understood that it was a two-stage test. he would have
to the disciplinary avoided the
procedures provided - The Tribunal wrongly failed to consider sanction. The
in the Act). evidence of the claimant’s good character Tribunal may
when setting out its findings of dishonesty. lawfully reach
(2) Any alleged The court found this to be a “significant legal the same
financial loss error”. Had the evidence been considered, it decision
following the
(caused by the might have effected the Tribunal’s findings.
Tribunal’s decision) rehearing.
is of a similar nature - The consequences that flowed from
to the benefit that Tribunal’s decision were serious. The
the legislation sanction imposed was penal. The claimant
confers. was struck off the register, which meant he
could no longer practice and there was also
the possibility of damage to his reputation.

167
Result: Allowed on both
grounds. The case was
remitted to the Tribunal for a
rehearing.

5. Mahmood v General Background: The claimant Yes Yes No

Medical Council challenged the decision of the
[2007] EWHC 474 Fitness to Practise Panel to (1) The Medical Act - Proceeding with the hearing in the claimant’s There was no
(Admin) proceed with a hearing in the 1983 confers a absence was a “clear and serious procedural causation: the
claimant’s absence when he benefit on irregularity”. The Panel was not completely claimant cannot
was ill. He was found guilty of individuals such as up-front about its reasons for continuing with prove that but
serious professional the claimant (the the hearing, and some of its conclusions for the illegality
misconduct and the Panel claimant is subject were overstated. In exercising its discretion, he would have
ordered his erasure from the to the disciplinary the Panel also failed to apply the relevant avoided the
register. procedures set out test, clearly and uncontroversially set out by sanction. The
in the Act). the House of Lords. Panel may
Grounds: Procedural lawfully reach
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
impropriety. the same
(2) Any alleged - The result was that the claimant was
decision
financial loss deprived of an opportunity to defend himself
Remedy sought: Quashing following the
resulting from the against a serious charge. The claimant’s
order. rehearing.
Panel’s decision is procedural rights were fundamental,
of a similar nature to especially given that his livelihood and
Result: Allowed. Case remitted
the benefit that the reputation were at stake.
back to the Panel for a
legislation confers.
rehearing.

7. Bryant v The Law Background: Appeal against Yes Yes No

Society [2007] the decision of the Solicitor’s
EWHC 3043 Disciplinary Tribunal which (1) The Solicitors - The Tribunal failed to apply the subjective Although the
(Admin) found the claimants guilty of Act 1974 confers a limb of the dishonesty test. In fact, at no point penalty was
professional misconduct and

168
benefit on did it articulate with any clarity the test it was reduced to
dishonesty and ordered that individuals such as applying. It thereby committed a serious legal suspension, the
they be struck off the Roll of the claimants (the error. effect was that
Solicitors. claimants are the claimants
subject to the - The Tribunal wrongly refused to consider would still have
Grounds: disciplinary evidence of the claimant’s good character been prevented
procedures set out when setting out its findings of dishonesty. from practising
(1) Error of law in the Act). This was also a serious error of law. See between the
(misapplication of the Donkin v The Law Society above. date of the
dishonesty test); (2) The alleged Panel’s decision
financial loss is of a and the court
(2) Failure by the Tribunal to similar nature to the hearing. There
take account of relevant benefit that the was therefore no
considerations (evidence legislation confers. loss.
of the claimant’s good
character);

(3) The allegations made

 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
against them had not been
proved.

Remedy sought: Quashing

order.

Result: Grounds (1) and (2)

allowed. The court quashed
the finding of dishonesty but
thought it would be wrong to
remit the matter back to the
tribunal, as on the evidence it
was clear that the dishonesty
test, correctly applied, was not
satisfied. Ground (3) was

169
allowed in part. The claimants
were guilty of misconduct but
to a lesser extent than had
been found by the Tribunal. It
replaced the penalty imposed
by the Tribunal with
suspension for a defined
period.

8.* Actis SA v Secretary Background: Review of the Yes Yes Yes

of State for Secretary of State’s decision
Communities and to publish an approved (1) The relevant - There was a complete failure to notify the There was
Local Government document which introduced statutory framework Commission in accordance with the relevant damage to the
[2007] EWHC 2417 changes relating to the (the Building Act Directive, which set out a clear procedure, claimant’s
(Admin) measurement of the 1984 and the and in circumstances where the changes commercial
performance of thermal Building introduced had “significant and far reaching interests – they
insulation products. Regulations) confers effects” (including substantial damage to the traded at lower
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
Grounds:
(1) The failure to notify the
European Commission of
changes effected by the
document was unlawful
(2) Breach of a legitimate
expectation and/or
conspicuous unfairness for
failure to consult.
Result: Allowed on both
grounds. The approved
document was held to be
170
inapplicable and
unenforceable.
9.* Bashir v Secretary Background: Claimant was an
of State for the asylum seeker who had been
Home Department detained following a conviction
[2007] EWHC 3017 for robbery. He was detained
(Admin) for a further 32 months
pending deportation. He
refused to return to Iraq
voluntarily.
Grounds: Illegality.
Result: Allowed. The court
4
Conferral of benefit Serious fault Causation
a benefit on commercial interests of a large part of the levels of
individuals such as industry). This amounted to a manifest turnover and
the claimant. breach of EC law. profitability than
would have
(2) The financial loss - In relation to the second ground, the been the case if
suffered is of a department had demonstrated high levels of the changes had
similar nature to the incompetence. Only the competitors had had not been made.
benefit that the any input into the process leading to the
legislation confers. change. Although a representation had been
made about consultation, it was not
performed and had caused serious detriment
to the claimants. Even when the Department
realised its mistake, it obfuscated rather than
confronted its mistakes in a clear and
straightforward manner. The court
considered that the Department’s conduct fell
“a long way short of the standards that those
dealing with a Government Department are
entitled to expect”.
Yes Yes Yes
(1) The Immigration - The claimant had been administratively
Act 1971 confers a detained for an unreasonably lengthy period
benefit on of time with no immediate prospect of
individuals such as removal, and in circumstances where bail
the claimant. would have been appropriate.
(2) The loss the Note that the decision is being appealed.
claimant suffers as a
result of the
detention is of a
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
made a declaration that the similar nature to the
detention was unlawful and benefit that the
ordered that the claimant be legislation confers.
released on bail subject to
stringent conditions.

10. Gwynn v The Background: Review of the Yes Borderline No

General Medical Panel’s refusal to stay
Council [2007] disciplinary proceedings (1) The Medical Act - The allegations were allowed to proceed There does not
EWHC 3145 against the claimant. The 1983 confers a even though they were clearly out of time appear to be
(Admin) complaints that formed the benefit on and the Registrar had not properly any loss as the
basis of the proceedings had individuals such as considered the test for allowing complaints to case against the
arisen from procedures carried the claimant (who is proceed out of time. claimant had not
out five years previously, with subject to the yet proceeded to
one of the complaints having disciplinary - In addition, one of the complaints had been a full hearing,

171
already been considered and procedures set out resurrected three years after it had initially nor had any
dismissed. in the Act). been considered, dismissed, and formally sanction been
closed by the GMC. The claimant did not imposed.
Grounds: (2) Any alleged have notice of this complaint until four and However it is not
financial loss (for half years after it was made. The GMC acted clear whether
(1) Illegality; example if the contrary to clear procedure for disposing of the claimant had
claimant had been complaints set out in the relevant statute and been suspended
(2) Procedural irregularity. suspended pending a Manual issued by the Fitness to Practice pending the
the hearing) is of a Directorate. The claim was nevertheless hearing – if so,
Remedy sought: Quashing similar nature to the allowed to proceed by the Panel. he may recover
order. benefit that the damages for
legislation confers. loss of earnings.
Result: Allowed. The GMC had
erred in refusing to allow the
stay of proceedings. The
decision was quashed.
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
11. Hill v Bedfordshire Background: Claimant sought
County Council a review of the Local
[2007] EWHC 2435 Education Authority’s
(Admin) (LEA)refusal to amend his
statement of special
educational needs when he
changed schools, and so to
continue to fund his education
until the age of 19.
Grounds: Illegality
Remedy sought: Quashing
order.
172
Result: Allowed on both
grounds. LEA’s decision
quashed.
12. H and Others v Background: H, X and B, who
London Borough of were children in need,
Wandsworth and challenged the decision of the
Others [2007] local authority to provide
EWHC 1082 accommodation to them under
(Admin) section 17 rather than under
section 20 of the Children Act
1989.
4
Conferral of benefit Serious fault Causation
Yes Yes Yes
(1) The relevant - The authority consistently maintained that it The claimant
statutes (the did not have the power to fund the claimant’s may recover the
Education Act 1996 placement, despite the fact that statute cost of schooling
and the Local clearly provided it with such a power. It met by the
Government Act eventually admitted its error but still refused parents.
2000) confer a to exercise its discretion in favour of the
benefit on claimant. Crucially, this refusal was based on
individuals such as a serious error of fact – that the parents had
the claimant. made no attempt to make alternative
arrangements for funding, when
(2) The financial loss correspondence before the authority clearly
resulting from the demonstrated that the parents had
LEA’s decision (the approached the relevant body.
parents had to fund
their child’s - Further, the LEA did not notify the claimant of
schooling) is of a his right to appeal their refusal to maintain a
similar nature to the statement of special needs.
benefit that the
legislation confers. - There was much at stake (the education of a
child with special needs).
H’s case: Yes H’s case: Yes H’s case: Yes
X’s case: Yes - The claimant clearly fell within section 20, but X’s case: Yes
the local authority determined and specified
B’s case: Yes that provision was being made under section B’s case: N/A
17. (It was in the local authority’s interests to
(1) The Children Act do so: it could avoid providing further and
1989 confers a continuing support if provision was
benefit on
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
individuals such as considered to be made under section 17.)
Grounds: The decisions and
the claimants.
the national guidance on which
- The law was clear: there was case law which
the decisions were based were
(2) The loss they clarified the relationship between sections 17
unlawful.
claim is of a similar and 20. Although the national guidance was
nature to the benefit misleading, it was neither wrong or unlawful.
Remedies sought:
that the legislation The court held that the local authority’s
confers (provision of approach was in fact not at all in accordance
(1) Quashing orders and accommodation). with the 1989 Act or the guidance.
declarations in relation to
the decisions where
- The local authority insisted that C had made
appropriate;
“an informed decision” to opt for section 17.
They had essentially required a child who
(2) Declaration that the
was “little educated” and whose English was
national guidance was
poor to make a complex choice between
erroneous.

173
section 17 and section 20 on the basis of a
small-print document, assisted by interpreter
Result: whose language was not exactly his own: the
court described this as “little short of bizarre”.
H’s case: Allowed. The
decision by the local authority - The consequences for the claimant are
to accommodate H under significant. If the accommodation were
section 17 was quashed. A treated as being provided under section 17,
declaration that the local he would have been denied the support to
authority was providing which he would otherwise be entitled when
accommodation to H under he became 18.
section 20 was granted.
X’s case: Borderline
X’s case: Allowed. A
declaration that No
accommodation was being
provided to X under section 20
- A proper assessment appears to have been
rather than section 17 was
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
granted.
B’s case: Dismissed.
174
13. James v Secretary Background: Review of
of State for Justice Secretary of State’s failure to
[2007] EWHC 2027 provide treatment courses to
(Admin) the claimant, a prisoner
serving indeterminate
sentences for public
protection.
Grounds:
4
Conferral of benefit Serious fault Causation
made; the claimant was not treated in an
unfortunate way.
Yes
- The local authority’s approach to the
claimant in terms of the law was the same as
in B’s case. It insisted that the claimant was
being provided with accommodation under
section 17 though section 20 clearly applied
even as a result of its own judgements.
- The consequences of the decision were the
same as in H’s case, but in this case, the
claimant was also moved to Coventry,
interrupting his studies. This was in
pursuance of a dispersal policy, which would
not have been engaged had the services
been deemed to be provided under section
20.
B’s case: No
Yes Yes Yes
(1) The relevant - The failure to provide treatment courses
legislation (Criminal frustrated the purpose of the Act. The
Justice Act 2003, legislation presupposed that treatment
Crime Sentences courses would be provided for the purposes
Act 1997, Powers of of reducing the danger that certain prisoners
Criminal Courts posed to the public. The claimant’s tariff had
(Sentencing) Act expired, and he continued to be detained
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result
2000) confers a only on the basis that he was still a danger to
(1) The Secretary of State
benefit on the public; there was no opportunity to
acted unlawfully in failing
individuals such as improve this situation since there was a lack
to provide courses;
the claimant. of treatment courses.
(2) The claimant’s continued
(2) The loss he - The claimant’s liberty was at stake, since he
imprisonment after expiry
claims resulting from would continue to be detained.
of tariff was unlawful;
his unlawful
detention is of a - Although it was not argued, the court
(3) This was also in breach of similar nature to the considered that there was force in the point
Art 5(4) ECHR.
benefit that the that if the prisoner was prevented from
legislation confers. making a meaningful submission to the
Remedies sought: Order to
Parole Board, which is then disabled from
release the claimant.
reaching a proper consideration, then that
would breach the claimant’s right under

175
Outcome: Allowed. Order article 5(4) ECHR.
granted to release claimant but
stayed pending appeal to - The failure to provide treatment courses
Court of Appeal. (The
could ultimately have potentially “disastrous”
Secretary of State’s appeal
consequences for the public in cases such
was successful on ground (2)
as these. A court would be bound to release
but failed on ground (1): [2007] an unlawfully detained person, even if he is
EWCA Civ 30) still dangerous (it was for this reason that the
order was stayed pending consideration of
the Court of Appeal).

14.* R (K) v Halton Background: Challenge to No Yes There is no

Borough Council local authority’s decision not to conferral of
[2007] EWHC 2485 destroy a file containing Decision not made - Breaking their promise to the claimant was benefit, so no
(Admin) personal information relating to under statute or the unlawful in number of respects: it breached a loss can be
the claimant, contrary to an prerogative. legitimate expectation, interfered with the claimed.
earlier promise made to him. claimant’s Article 8 rights, and was an However, the
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
Grounds: Failure to destroy
the file:
(1) Breached his legitimate
expectation;
(2) Breached Art 8 ECHR.
Remedies sought:
(1) Order to destroy the file;
(2) Alternatively, order that the
local authority conduct a
176
risk assessment to
determine whether or not
to destroy the file.
Result: Allowed. Order to
destroy the file granted.
15. O’Callaghan v Background: Review of an
Charity Commission order made by the
for England and Commission authorising the
Wales and Others trustees of Alexandra Park and
[2007] EWHC 2491 Palace to grant a lease to
(Admin) developers.
Grounds: The challenge was
4
Conferral of benefit Serious fault Causation
infringement of data protection principles. claimant would
This was true on any interpretation of the currently be able
promise. to obtain
damages under
- The consistent refusal to honour the promise the Human
meant that there was continuing Rights Act 1998.
unlawfulness.
- The initial promise had been carefully
considered and was particular to the
claimant. This trumped even the normally
definitive principle of child protection.
- Further, there had been no consideration
given to the decision not to destroy the file. If
the local authority had considered the matter,
it would have realised that there was no
justification for retaining the file.
- The promise-breaking had been
compounded by an earlier disclosure of the
file to OFSTED, a serious error which the
Ombudsman had already investigated.
No Yes No loss
The ministerial - A specific assurance of consultation was
assurance of made by a minister of the Crown in the
consultation went course of a debate in Parliament. The
beyond the statutory promise was made in order to meet the
requirements. concerns of opponents.
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
in essence to the adequacy of
the consultation exercise
which resulted from a
ministerial assurance.
Remedies sought:
(1) Declaration that the Order
which consented to the
lease was unlawful;
(2) Order quashing the
consenting Order.
Outcome: Allowed. Declaration
177
made and Order quashed.
4
Conferral of benefit Serious fault Causation
- The court described the Commission’s
interpretation of the assurance as “simply
unreasonable and wholly unrealistic”, and the
consultation process as “very seriously
flawed”. All that the Commission made public
was a draft order which gave consent to the
lease, and a question and answer document.
The details of the lease were withheld. Since
there was a “complete absence of any
information as what it was that consent was
proposed to be given to” the consultation
was therefore meaningless.
- This was not a case where some information
was provided which was inadequate: there
was a failure to give any essential
information.
- The Commission also failed to give further
consideration to whether and the extent to
which the details of the lease should be
made public even after representations from
a number of objectors, which were
acknowledged in a report to the Commission,
and by its own officials.
- The consultation as a whole was unfair,
since the trustees answered the concerns of
some objectors with references to the terms
of the lease, which had not been made
available to them in the first instance.
 1 2 4
No Case name with Grounds in judicial review, Conferral of benefit Serious fault Causation
3
neutral citation remedies sought and result

- There was a subsequent private assurance

made by the Commission to the trustees that
the lease would not be made public. The
Commission had no power to make this, and
it had “lost sight” of the need for consultation.

16. FH Cummings v Background: Claimants, who Yes Yes No loss

Weymouth and were property developers,
Portland Borough wished to use their land for a
Council [2007] residential development. A
EWHC 1601 local plan review adopted by
(Admin) the local authority effectively
prevented this. At the inquiry
dealing with the claimant’s
objections to this, the inspector
(1) The Town and - The inspector refused to allow the claimant
Country Planning to adduce important expert evidence; he
Act 1990 confers a made this ruling without considering the
benefit on report. He failed to review his decision after
individuals such as the hearing and an adjournment. In doing so
the claimant. he denied the claimants the opportunity to
rely on evidence which was determinative of

178
ruled that the claimant could
not rely on expert evidence
because it was not lodged in
time.
Grounds: Procedural
impropriety:
(1) Breach of natural justice
and Art 6 ECHR (failure to
give the claimant an
adequate opportunity to
put their case);
(2) There was no
loss in this case, but
any potential loss - The consequences were serious. The
would arguably have
been of a similar
nature to the benefit
that the legislation
confers.
a crucial issue before the inspector.
claimants were effectively denied a
fundamental right – the opportunity to
adequately put their case, or respond to the
authority’s, so far as a vital issue was
concerned, in a context where the local
authority was both the proposer and judge.
This substantially and unfairly prejudiced the
claimants in the hearing.

(2) The local authority failed to

give adequate reasons for
its designations in the
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
review.
Remedy sought: Quashing
order.
Result: Allowed on the first
ground. The court ordered
certain designations in the
review to be quashed.
17. R (A) v Liverpool Background: Claimant sought
City Council [2007] asylum on the basis that he
EWHC 1477 was 14 years old. Following an
(Admin) examination by a dental
surgeon the local authority
179
determined that he was an
adult, withdrew children’s
social services and removed
him to adult accommodation.
When the claimant sought
review of this decision, the
authority obtained further
reports but still reached the
same conclusion.
Grounds:
(1) Illegality (in treating the
dental surgeon’s opinion
as determinative, the
authority failed to take
account of a wider range
4
Conferral of benefit Serious fault Causation
Yes Yes No
(1) The Children Act - The legal position was clear – the authority There was no
1989 confers a was obliged to have regard to a wide range causation. The
benefit on of factors when determining the claimant’s authority may
individuals such as age; yet the authority considered only the lawfully make
the claimant. dental assessment, ignoring all other the same
relevant information both initially and when it decision again.
(2) Any alleged loss made its final decision. In doing so it failed to
resulting from the apply a logical and common sense approach
local authority’s to the assertions made in the dental report.
conduct is of a
similar nature to the - The authority also failed to provide the
benefit the claimant with an opportunity to see and
legislation confers. respond to the dental report. This was
despite an express request by the claimant’s
representatives that they see a copy of the
dental report if the report was being used as
an age assessment. The authority acted in
blatant disregard of this request.
- The consequences of a determination by the
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
of determinative factors);
(2) Procedural impropriety
(breach of natural justice).
4
Conferral of benefit Serious fault Causation
authority were serious – the denial of social
services to which the claimant was
potentially entitled.

Remedy sought: Declaration

and quashing order.

Result: Allowed on both

grounds. The court made a
declaration that the earlier
decision had been made
unfairly, and quashed the
authority’s ultimate decision
relating the claimant’s

180
probable age. The authority
was also ordered to make a
determination of the claimant’s
age by a specified date, and to
give notification to the
claimant’s representatives of
this decision.

18.* S v Secretary of Background: Claimant was Yes Yes Yes

State for the Home detained in an immigration
Department [2007] centre pending determination
EWHC 1645 of her asylum claim. Her claim
(Admin) was denied and it was decided
that she would continue to be
detained pending deportation
(it was expected that the
claimant would be deported
(1) The Immigration - The claimant had been detained in the
Rules confer a immigration centre for a lengthy period
benefit on (which was found to be unreasonable), in
individuals such as circumstances where the detention of two
the claimant. young children was involved, and it was
difficult to conclude on the evidence that
(2) The loss claimed there was a likelihood that the claimant
 1 2
No Case name with Grounds in judicial review,
3
neutral citation remedies sought and result
within two months). The
claimant challenged the
legality of the detention.
Grounds:
(1) Illegality;
(2) Breach of Arts 5 and 8 of
the ECHR.
4
Conferral of benefit Serious fault Causation
resulting from the would abscond if released temporarily.
detention is of a
similar nature to the - There had been no meaningful investigation
benefit that the of the children’s health during the detention
legislation confers. period with the result that that the baby
developed anaemia and rickets: the court
found that this was both foreseeable and
avoidable

Remedy sought: Declaration.

Result: Allowed. The court

made a declaration that the

181
claimant’s detention pending
deportation was unlawful and
in breach of the ECHR.